The U.S. Small Business Administration has extended the deferral periods of all Economic Injury Disaster Loans, including loans made under the COVID-19 EIDL program, until 2022.
The first payment due date for all SBA disaster loans made in 2020 has been extended from 12 months to 24 months of the origination of the loan. The first payment due date for all SBA disaster loans made in 2021 will be extended from 12 months to 18 months from the date of the note. Disaster loans made prior to 2020 also have received an automatic deferment of principal and interest payments until early 2022.
“Small businesses, private nonprofits and agricultural enterprises, including those self-employed individuals, contractors and gig workers, continue to navigate a very difficult economic environment due to the continued impacts of the coronavirus COVID-19 pandemic, as well as historic severe winter storms in 2020,” SBA Administrator Tami Perrillo said in a news release.
Existing SBA disaster loans approved prior to 2020 in regular servicing status as of March 1, 2020, received an automatic deferment of principal and interest payments through December 31, 2020. This initial deferment period was subsequently extended through March 31, 2021, and an additional 12-month deferment of principal and interest payments will be automatically granted to these borrowers. Borrowers will resume their regular payment schedule with the payment immediately preceding March 31, 2022. Borrowers may voluntarily continue to make payments during this time, and SBA is reminding loan recipients that interest will continue to accrue on the outstanding balance of the loan throughout the duration of the deferment.
According to the news release, the SBA is working to make available all previously approved coronavirus pandemic stimulus funding, and administer the targeted programs related to provisions in the 2020 Economic Aid Act. At the same time, SBA is working to implement President Biden’s “American Rescue Plan” and its additional targeted programs and funds allocated for small business and nonprofit organizations.
In mid-February, SBA reached a milestone in the COVID-19 EIDL program by approving more than $200 billion in low-interest loans that provide working capital to small businesses, nonprofits and agricultural businesses. The agency continues to approve more than $500 million in loans each week.
COVID-19 EIDL loans come with a 3.75% interest rate for small businesses and 2.75% interest rate for nonprofit organizations, and have a 30-year maturity. Interest continues to accrue during the deferment period and borrowers may make full or partial payments if they choose.
Questions on SBA COVID-19 EIDL and disaster loan payments can be answered by email at [email protected] or by calling SBA’s Customer Service Center at 1-800-659-2955 (TTY: 1-800-877-8339).