COVID-19 SBA Loan FAQ - Rhode Island Commerce

SBA loans and information

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For non-SBA funding opportunities, grants and loans click here.

We understand that there is much misinformation about loans and other programs created by the CARES Act. We are working closely with the Rhode Island SBA and will update information from them as it is available. Please check back here frequently for updates. 

EIDL (Economic Injury Disaster Loan) - REOPENED FOR APPLICATIONS

The SBA’s COVID-19 Economic Injury Disaster Loan (EIDL) is another way to get funding for your business during this crisis. This loan provides up to $2 million at 3.75%, for up to 30-year terms. An advance grant of up to $10,000 may also be available through this program.

Click here to apply, and be prepared to provide:

  • SSN/EIN Number
  • Gross revenue for 2018 or 2019 (from tax returns)
  • Cost of goods sold for 2018 or 2019 (from tax returns)
  • Date business was established or owned
  • Number of employees (1099 contractors excluded from employee count)
  • Bank name
  • Account number
  • Routing number
PPP (Paycheck Protection Program)

The PPP program provides forgivable loans at 1% interest, up to $10 million, through SBA approved lenders to help small businesses bring their employees back on the payroll & cover qualified business expenses for 8 weeks during the COVID19 pandemic. View a list of Rhode Island lenders here

Download a printable version of the following FAQ here. Translated text of this content is available in ChineseFrenchPortuguese and Spanish.

Is my business eligible?

  • All businesses — including nonprofits, veterans’ organizations, sole proprietorships, self-employed individuals, and independent contractors – with 500 or fewer employees
  • Business must have been impacted as a result of COVID 19 pandemic
  • Business and employees must be based in the United States of America

What expenses will the loan cover?

Payroll costs

  • Salary, wages, commissions and tips (capped at $100k/year/employee)
    • Note: Payroll for employees who earn tips can be based on employee records of past tips or in the absence of such records, a reasonable, good-faith employer estimate of such tips
    • Note: Payroll for independent contractors or sole proprietors can include wage, commissions, income, net earnings or similar compensation
  • Most benefits including costs for vacation, parental, family, medical or sick leave; payments required for the provisions of group health care benefits including insurance premiums; payment of any retirement benefit; payment of state and local taxes assessed on compensation of employees

Business costs

  • Mortgage interest payments (NOT mortgage prepayments or principal payments), rent payments and utility payments
    • Note: All service contracts and/or lease/debt agreements must have been in place prior to February 15, 2020

Refinancing an SBA Economic Injury Disaster Loan (EIDL)

  • If you received an EIDL loan from January 31, 2020- April 3, 2020, you can refinance it using a PPP loan
    • Note: If your EIDL loan was used for payroll costs, your PPP loan must be used to refinance your EIDL loan
  • Proceeds from any advance up to $10,000 on the EIDL loan will be deducted from the loan forgiveness amount on the PPP loan

Will this loan be forgiven?

Borrowers will be eligible for loan forgiveness equal to the amount that the borrower spent on qualified expenses during the 8-week period which begins the day the funds are deposited into the business’s account, assuming adequate records are kept. At least 75% of the total loan amount must be spent on payroll costs for employees. Employee count must match or exceed the number of employees used when submitting your application.

The amount of the loan that will be forgiven will be reduced proportionally if the following are not met:

  • A business fails to spend at least 75% of the loan amount on payroll
  • A business fails to pay at least the same number of employees used on the application
  • A business cuts wages in excess of 25% for any employees

How to calculate your maximum loan amount:

  • Step 1: Calculate your total payroll costs using information from 2019 for employees whose principal place of residence is the United States.
    • Note: Time frames may differ for seasonal businesses.
  • Step 2: Any employee making $100,000 or more a year is capped at $100,000 Subtract any compensation paid to an employee in excess of annual salary of $100,000.
  • Step 3: Calculate average monthly payroll costs (divide the amount from Step 2 by 12).
  • Step 4: Multiply the average monthly payroll costs from Step 3 by 2.5.
  • Step 5: Add the outstanding amount of an Economic Injury Disaster Loan (EIDL) made between January 31, 2020 and April 3, 2020, and subtract the amount of any “advance” under an EIDL COVID-19 loan (because it does not have to be repaid).The result of Steps 1-5 is the maximum loan amount for which you will be eligible.

How do I apply?

PPP loans are secured through a local bank, credit union or other lender. Gather the documentation listed below and contact a participating local lender to submit your application. You will improve your chances for receiving a loan under this program if you have a complete application before contacting the lender. For a complete application, you will need:

  • A completed Paycheck Protection Program Borrower Application Form, found on the US Department of the Treasury’s website:
  • Your business launch date, amount of annual sales/revenue and mailing address
    • Documentation may include your company’s articles of incorporation, EIN/TIN, copies of your tax returns, etc.
  • 2019 IRS Quarterly 940, 941 or 944 payroll tax reports
  • Payroll reports for a 12-month period (ending on the most recent payroll date)
    • Documentation may include receipts/reports from your payroll company, W3 from a previous tax year, bank account statements.
    • Note: Independent contractors can submit 1099s for 2019.
  • Total health insurance premiums paid by the company owner(s) under a group health plan (including all employees and the company owners)
  • Documentation may include copies of invoices and/or payments made to insurance companies.
  • Sum of all retirement plan funding that was paid by the company owner(s), including 401K plans, Simple IRAs and SEP IRAs for all employees and owners
    • Documentation may include copies of invoices and/or payments made to retirement plan facilitators

For more information on the Paycheck Protection Program, visit

Click here to apply for PPP.

SBA Stimulus Update Webinar

Rhode Island Commerce Secretary Stefan Pryor took questions and went over the Paycheck Protection Program the Rhode Island Small Business Administration (SBA) and Rhode Island Small Business Development Center. Watch the webinar here.
State Trade Expansion Program (STEP)

If you are a small business and an exporter, the State Trade Expansion Program (STEP)  grant can provide you with funding to increase exports. As part of the CARES Act, the SBA has increased the maximum STEP grant reimbursement to eligible small businesses for website development and for design of marketing materials from $3,000 to $6,000. (Reimbursement is based on 50%-75% of the total cost, up to a maximum of $6,000.)

With grant funding, administered by the John H. Chafee Center for International Business at Bryant University with support from Rhode Island Commerce, companies can engage with outside consultants and firms to help develop marketing strategies and materials for international customers. You can review the program guidelines for other ideas of ways to use STEP funding here.

For more information and to enroll in STEP, contact, Linda Woulfe, STEP Program Director, at 401-232-6525 or at



Q: What is the Paycheck Protection Program?

The Paycheck Protection Program (PPP) is a loan program specifically designed to help small businesses keep their workforce employed. It will be available retroactive from Feb. 15, 2020, so employers can rehire their recently laid-off employees through June 30, 2020. Most importantly, the SBA will forgive the portion of the loan proceeds that are used to cover the first eight weeks of payroll costs, rent, utilities, and mortgage interest.

Q: Where do I apply for a PPP?

Lenders, banks and credit unions will be offering PPP loans starting April 3, 2020. (This is different from the COVID-19 Economic Injury Disaster Loans, which are administered directly by the SBA.) Businesses should apply directly to these participating lenders; the SBA intends for PPP loans to be approved on the same day. View a list of Rhode Island lenders here

If your small business or nonprofit has been unable to submit a PPP application through a lending institution then you may qualify for a PPP loan of up to $250,000 through a partnership among Goldman Sachs, Rhode Island Commerce and CRF. Learn more here

Q: How is a PPP loan different from an Economic Injury Disaster Loan?

The PPP loan program will provide capital to businesses without collateral requirements, personal guarantees, or SBA fees – all with a 100% guarantee from SBA. All loan payments will be deferred for six months. The terms of the loans are also different from the EIDL loans, as you can see below.

Q: Should I apply for the PPP or the EIDL?

You should consider applying for both the SBA Economic Injury Disaster Loan – which will give you access to grant of up to $10,000 in addition to the loan – as well as the paycheck  protection program loan.

The PPP loan program can help with payroll costs and is the better loan tool if you have retained or plan to rehire your employees before June 30, 2020. The EIDL loan program can help with fixed costs that you may still need to pay despite a temporary loss in revenues such as rent, mortgage, and utilities. You can apply for both programs, but should not apply to both for the same purposes.

Q: What are the PPP loan terms and conditions?

  • Eligible businesses: All businesses, including non-profits, Veterans organizations, Tribal concerns, sole proprietorships, self-employed individuals, and independent contractors, with 500 or fewer employees, or no greater than the number of employees set by the SBA as the size standard for certain industries
  • Maximum loan amount up to $10 million
  • Loan forgiveness if proceeds used for payroll costs and other designated business operating expenses in the 8 weeks following the date of loan origination (due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs)
  • All loans under this program will have the following identical features:
    • Interest rate of 1%
    • Maturity of 2 years
    • First payment deferred for six months
    • 100% guarantee by SBA
    • No collateral
    • No personal guarantees
    • No borrower or lender fees payable to SBA

Q: What is the COVID-19 EIDL and how do I apply?

The SBA is making funds available to businesses now through one new, streamlined application (released March 30, 2020). Small business owners that apply for an Economic Injury Disaster Loan are eligible to receive an advance of up to $10,000 within three days of a successful application. This loan advance will not have to be repaid.

In addition, they may receive up to $2 million through the SBA Economic Injury Disaster Loan. The loan advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. To learn more about COVID-19 Economic Injury Disaster Loans, click here.

Q: I submitted an application before March 30; should I reapply?

Based on conversations with the Rhode Island SBA, we recommend that businesses who applied for loans prior introduction of the new loan advance and application process reapply.

Q: How will I know that my EIDL application has been received by the SBA?

As soon as you submit your application to the new online system, you will receive an application number with confirmation that your application has been submitted. Write down and keep your application number. Once your application is processed, you will be notified through the email address you submitted if any additional information is needed. If you have questions regarding the status of your loan you can call the SBA hotline at 1-800-659-2955.


Where else can I get help?

The Rhode Island Small Business Development Center is available to answer additional questions you may have about SBA loans at no cost. You can register for free, confidential business advice here.

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