Do you remember those $10,000 EIDL  (Or $1,000 per employee) "Grants" from the beginning of the pandemic? While receiving your grant might feel like centuries ago, they will catch up with you if you received a PPP and apply for forgiveness.

Here is the deal. When you submit your application for forgiveness, your EIDL Grant will be subtracted from your total amount eligible for forgiveness and turn into a two to five-year loan.  Here is an example, if you received a $100,000 PPP and are eligible for 100 percent forgiveness.  You will be granted $90,000 of forgiveness, and the balance of $10,000 will become a loan. If the same applicant is only eligible for $80,000 of forgiveness based upon how they spent their PPP money, they will now have a $30,000 loan.

In some instances, someone might have received an EIDL grant that was larger than their PPP loan.  In these cases, they are not eligible for any forgiveness on their PPP, and the full balance will become a loan that amortizes over two or five years. 

Keep in mind that this rule only applies to the $10,000 or less EIDL grants or advances. If you received an actual EIDL loan, that is a separate transaction and has no impact on your PPP forgiveness.