Frequently Asked Questions – Money Available to Small Businesses to Help Recover from the COVID-19 Pandemic


What is the CARES Act?

The full name is Coronavirus Aid, Relief, and Economic Security Act. It is the new act Congress created to provide financial aid to individuals and businesses who are suffering economic loss caused by COVID-19. The CARES Act has two components: the Economic Injury Disaster Loan (“EIDL”) and the Paycheck Protection Program (“PPP”).

What businesses are covered by the CARES Act?

Generally, most small to mid-size businesses will benefit from this Act. There are different requirements for different kinds of financial aid program.

What kinds of financial aid can I get?

Under this Act, you can get an Economic Injury Disaster Loan (EIDL) and a loan from the Paycheck Protection Program (PPP).

How do I apply?

You can apply for the EIDL through the Small Business Administration (“SBA”) directly. Local financial institutions who participate in the PPP will accept loan application under this program. The Bank of Hawaii, First Hawaiian Bank, and the Bank of Guam are all participating.


What is the Economic Injury Disaster Loan?

Economic Injury Disaster Loan (“EIDL”) is a low interest long term loan which you can use to finance your business and mitigate the financial damage your business suffered from COVID-19. The amount you can borrow depends on the actual damage suffered by your business. The maximum amount is $2 million. When you apply to EIDL, you can also request an advance grant of up to $10,000. If your business uses the grant for qualified uses, the grant does have to be repaid.

How do I apply?

You can apply through the SBA website application portal:

What document do I need to submit?

The initial loan application process does not require supporting documents. After submitting the application, an SBA representative will contact you for further information.

How long will it take to get the grant?

If you requested the maximum $10,000 grant in your application, based on the Act, the grant should be made within just 3 days.

Are there restrictions on the grant?

The grant does not need to be repaid if applicant uses it to pay qualified expenses. You can use the grant for any allowable purpose for a EIDL loan, including, providing paid sick leave to employees unable to work due to the direct effect of the COVID–19, maintaining payroll to retain employees during business disruptions or substantial slowdowns, meeting increased costs to obtain materials unavailable from the applicant’s original source due to interrupted supply chains, making rent or mortgage payments and repaying obligations that cannot be met due to revenue losses.


What is Payment Protection Program?

The Paycheck Protection Program (“PPP”) allows eligible applicants to apply for a loan to cover their paycheck costs and certain other allowable expenses.

Is it true the loan does not have to be paid back?

Yes. Repayment of the loan will be waived if the employer will use the loan to pay payroll costs, certain interest payments, payments on any covered rent obligations, and covered utility payments within the 8-week period beginning on the date of the origination of the loan.

How much can my company borrow?

For most of the companies, the maximum amount of the loan is 2.5 time of the average total monthly payments by the applicant for payroll costs incurred during the 1-year period before the date on which the loan is made, plus the outstanding amount of the EIDL.

Who can apply?

For most of the SBA loans, the business has to be “small business concern” to qualify. However, the CARES act expanded the scope of the eligible applicants. Now any business concern, private nonprofit organization, or public nonprofit organization which employs not more than 500 employees can apply for this loan.

When will it be available?

The PPP loan is open for applications now. Applicants can apply to the loan through any local bank who is participating in this program. Bank of Hawaii, First Hawaiian Bank, and the Bank of Guam are all participating.

What documents do you need to submit?

The financial institution will provide an application package and a document list. Generally speaking, you will need organization documents of your business, business licenses, and IDs of the owners. You will also need to provide evidence of the payroll expenses you used to calculate the amount of loan you are applying for. For example, IRS form 940 and 941. In addition, you will need to provide other documents specifically required by the financial institution.

How long will it take to get the loan?

It depends on the financial institution which accepts your application. Because this loan is an emergency aid to small businesses, the time shouldn’t be long. However, lots of businesses should apply and the banks might be overwhelmed. Please contact your bank for further information.


Can my business apply for both?

Yes. If your business qualifies for both programs, you can apply for both. However, you are not permitted to hold funds from both programs for the same purpose. If you already have the EIDL, you can use PPP to refinance the outstanding balance of the EIDL.

How much of the loan will be forgiven if I apply for both?

Under EIDL, the up to $10,000 grant does not need to be repaid. Under PPP, if you use the loan to pay the covered costs, you do not need to pay it back. However, if you already obtained the grant from the EIDL and will not pay it back, the amount of the grant will be deducted from the amount waived for you under the PPP.
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