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To speed up the process, you want to apply with a bank where you already have a relationship. I’d suggest trying your local bank first because they’re viewing this as a way to get new customers.”

—Kimberly Weisul, editor-at-large for Inc. Magazine and Inc.com

It’s no secret that small businesses are hurting right now. Local restaurants, salons, and fitness studios across the country have closed their doors in order to help flatten the coronavirus curve and contain the spread of COVID-19, and needless to say, closing shop has put untold financial strain on these businesses.

In previous installments of our Ask an Expert series, we’ve covered how to get financial relief as a small business owner, how to pivot to digital even if your business isn’t online, and how to support small businesses right now (even if you can’t afford to spend a dime). In today’s segment, we tapped the editor-at-large for Inc. Magazine and Inc.com, Kimberly Weisul, to talk us through what we need to know about the small business stimulus package so far (note: information is still forthcoming from the government on when payments will be released, how independent contractors can apply, and more).

That said, here are some key takeaways from the conversation, including a breakdown of the Paycheck Protection Program and the Economic Injury Disaster Loan Emergency Advance.

The Paycheck Protection Program

Who can apply?

“Almost any business with less than 500 employees is eligible to apply. If you’re self-employed, an independent contractor, or someone who receives 1099 tax forms, you can apply starting this Friday, April 10. Small not-for-profits and faith-based business are eligible to apply as well.

What are the details?

“This loan is designed to be used especially for paying employees. It’s a loan that has the potential to turn into a grant if you use 75% of the money for payroll expenses and you keep your employees on for at least 8 weeks after getting the loan

You can apply for up to 2x the amount of your payroll for the previous year. It’s a two-year loan with a 1% interest per year. You don’t need to put up collateral or a personal guarantee and you don’t need to show that you tried to get credit elsewhere and failed.

More information will be available for independent contracts on how they can calculate their income this week—this information is not yet available.”

How do I apply?

“The loan is guaranteed by the U.S. Small Business Association (SBA), but you’ll need to apply through a bank. That said, banks aren’t set up for this yet. On the first day, Bank of America received 800,000 applications.

To speed up the process, you want to apply with a bank where you already have a relationship. I’d suggest trying your local bank first because they’re viewing this as a way to get new customers.

If your bank has told you they’ve already closed applications, keep in contact with them because they might open applications up again, but I would suggest that you start bank shopping. Keep in mind that the interest rate for this loan is fixed, so if you find interest rates higher than 1% that’s illegal.”

What else do I need to know?

“Be careful when you apply that you know what you’re signing up for. If you’re using an intermediary, you should read the fine print on all the documents. You’re sharing a lot of financial information so you want to be clear on what you’re signing up for.”

When can I expect to receive funds?

“The most optimistic projection I’ve heard for the release off funds is one week. We’re thinking at least two weeks.”

The Economic Injury Disaster Loan Emergency Advance (EIDL)

Who can apply?

“Almost any business with less than 500 employees is eligible to apply.”

What are the details?

“If you apply in good faith, you can ask for the $10,000 to be granted to you immediately, and if you eventually declined for the loan, that $10,000 is forgiven. So it’s well worth the time to apply for this loan.

It can only be used for working capital. For example, say you’re a restaurant, you can keep the employees on using the Paycheck Protection Program loan, but you can use the working capital to pay for inventory that’s spoiled.”

How do I apply?

“You can apply directly through The U.S. Small Business Association (SBA). Only about half the application form is up, meaning it’s really easy to apply for this lean quickly. This money would come directly from the SBA, in other words, you don’t need to have a relationship with a bank, unlike the Paycheck Protection Program.”

When can I expect to receive funds?

“The most optimistic projection I’ve heard for the release off funds is one week. We’re thinking at least two weeks.”

**”If you do apply for either of these loans, you need to make sure your bookkeeping is up to speed. Be very careful. If you do get one of these loans and you’re ultimately looking to have it forgiven, you will need to have the documentation to make sure that happens.”

**”If you already have an SBA loan (you may also know this as a 7A loan) through your bank, they’re offering deferment on payment for up to six months so that’s cashflow that you can have coming in right now. Talk to your bank—keep in mind that they’re very overwhelmed—and set this up.”

About the Expert: Kimberly Weisul is the editor-at-large for Inc. Magazine and Inc.com, where she writes features, opinion, and news stories about entrepreneurship, women, and technology. Before joining Inc., she was a senior editor at a BusinessWeek, where she directed all coverage of small business and entrepreneurship and was the founding editor of a spin-off publication, BusinessWeek SmallBiz. She is also the creator of The Fundery, the only searchable database of venture funds that have a mandate to invest in women.