As you can see, SBA disaster loans come in smaller loan amounts than PPP loans, and they have higher interest rates (though still very low and competitive).
So why would you want a disaster loan?
Well, first of all, when you get an SBA disaster loan, you can qualify for an immediate advance of $10,000―and you don’t have to repay it. In other words, you get a $10,000 grant.
SBA disaster loans also have a few more approved uses than PPP loans (though not many). In addition to the things you can use a PPP loan on (like payroll and utilities), you can use SBA economic injury disaster loans on all sorts of existing debt, accounts payable, and bills. So if you’ve got big bills that aren’t strictly utilities or rent, a disaster loan might be a better fit.
And finally, as we mentioned earlier, there’s a cap on the Paycheck Protection Program. There’s a good chance funds will run out. If that happens, economic injury disaster loans will look a lot more appealing.
(Also, the SBA was extending disaster loans long before the CARES Act passed. It was the only option for a while.)
At any rate, both loan programs are providing valuable funds at low costs to business owners.