With the upheaval of the last few years, millions of small businesses have taken advantage of Covid-related relief funds to stay afloat. With no additional relief from Congress in sight, there is some good news for small businesses and not-for-profits that received the Economic Injury Disaster Loan (EIDL). The Small Business Administration (SBA) has extended the deferment period for 30 months from when the loan was approved.
This extension from the SBA is intended to provide some additional relief to small businesses that might still be impacted by the pandemic, by supply chain issues, and by problems stemming from rising inflation.
Disaster loan deferments have already been extended several times, but this latest extension applies to all EIDL loans approved since 2020. Interest will continue to accrue on the loans through the deferment period, and borrowers can make partial or full payments during the deferment period if they choose.
Key information regarding deferment from the SBA:
- This deferment extension is effective for all COVID-EIDL Loans approved in calendar years 2020, 2021, and 2022. Loans now have a total deferment of 30 months from the date of the Note. Interest will continue to accrue on the loans during the deferment.
- Borrowers may make partial or full payments during the deferment period but are not required to. The SBA recommends using pay.gov.
- The SBA will not send monthly SBA Form 1201 payment notices; however, the SBA will send regular payment reminders via email.
- Existing COVID EIDL Borrowers can find account balances and payment due dates in the SBA Capital Access Financial System (CAFS) and learn how to set up an account in the CAFS system by logging in at Capital Access Financial System (sba.gov).
- Deferments may result in balloon payments. The deferment will not stop any established Preauthorized Debit (PAD) or recurring payments on the loan. COVID-EIDL Borrowers with an SBA established PAD must contact their SBA servicing center to stop recurring payments during the extended deferment period. COVID-EIDL Borrowers who have established a PAD through Pay.Gov or any other bill pay service are responsible for terminating recurring payments during the extended deferment period.
- After the deferment period ends, COVID-EIDL Borrowers will be required to make regular principal and interest payments beginning 30 months from the date of the Note.