The U.S. Small Business Administration (SBA) has announced that the agency will provide additional deferment of principal and interest payments for existing COVID-19 Economic Injury Disaster Loan (EIDL) program borrowers.
The deferment extension is effective for all COVID-19 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.
The extended deferment period will provide additional flexibility to small business owners impacted by the pandemic, especially those in hard-hit sectors managing disruption with recent variants, as well as recent supply chain and inflation challenges amid a growing economic recovery.
Among key COVID-19 EIDL deferment details:
- Borrowers may make partial or full payments during the deferment period but are not required to. The SBA recommends using gov.
- The SBA will not send monthly SBA Form 1201 payment notices; however, the SBA will send regular payment reminders via email.
- Existing COVID-19 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 here.
- Deferments may result in balloon payments. The deferment will not stop any established Preauthorized Debit (PAD) or recurring payments on the loan. COVID-19 EIDL Borrowers with an SBA established PAD must contact their SBA servicing center to stop recurring payments during the extended deferment period. COVID-19 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-19 EIDL borrowers will be required to make regular principal and interest payments beginning 30 months from the date of the note.
Since its inception, the COVID-19 EIDL program, a federal disaster relief loan, has allocated more than $351 billion in relief aid to 3.9 million borrowers.
“Though our small business owners continue to power a historic economic recovery under the Biden-Harris Administration, we must continue to do everything in our power to meet our small businesses where they are with resources to ensure they can recover and thrive,” states SBA Administrator Isabella Casillas Guzman.
“This extended principal and interest deferment will provide financial relief to millions of small business owners — particularly those hardest-hit by the pandemic and related marketplace challenges — so they can continue to pivot, adapt and grow.”
This article originally appeared on our sister publication Security Sales & Integration’s website.