EIDL loans, or Economic Injury Disaster Loan program loans, are a type of SBA disaster loan. SBA disaster loans are nothing new. For quite a few years now, business owners have been able to get disaster loans in response to things like hurricanes, droughts, and now pandemics.
Note that SBA EIDL loans as a whole aren’t actually coronavirus-specific. But given current events, when most people talk about EIDL loans, they mean the version rolled out in response to the pandemic, with its own set of rules and terms. (And that’s how we’ll use the term for the rest of this article.)
PPP loans, or Paycheck Protection Program loans, are from a much newer loan program. The Paycheck Protection Program was created in 2020, as part of the CARES Act (Coronavirus Aid, Relief, and Economic Security Act). That means that PPP loans are all pandemic-specific.
At this point, you can get two types of PPP loans: First Draw PPP loans and Second Draw PPP loans. First Draw loans go to business owners applying for their first PPP loan, while Second Draw loans go to (you guessed it) business owners applying for their second PPP loan. They work pretty much the same way.
So now that we’ve gotten their basic definitions down, we can talk about how EIDL loans and PPP loans actually compare.