SBA EIDL Payments Not Due Until 2022

Small businesses have even more time to pay off certain emergency loans as the SBA said the first due date for repayment of EIDLs made in 2020 is extended from 12 months to 24 months from the date of the note. For loans made in 2021, including loans under the COVID-19 EIDL program, the first payment due date is extended from 12 months to 18 months from the date of the note.

Mar 15th 2021
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On March 12, 2021, the Small Business Administration (SBA) announced that borrowers have until 2022 to meet their obligations under the COVID-19 Economic Injury Disaster Loan (EIDL) program. Borrowers will resume their regular payment schedule with the payment immediately preceding March 31, 2022, unless the borrower voluntarily continues to make payments while on deferment.

Important note: Interest will continue to accrue on the outstanding balance of the loan throughout the duration of the deferment.

The COVID-19 EIDL program was established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide economic relief to small businesses and nonprofit organizations experiencing a temporary loss of revenue due to the pandemic.  

“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,” said SBA Administrator Tami Perrillo in a press release. “The COVID-19 EIDL program has assisted over 3.7 million of small businesses, including non-profit organizations, sole proprietors and independent contractors, from a wide array of industries and business sectors, through this challenging time,”

Previously, 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 then extended through March 31, 2021. Now an extra 12-month deferment of principal and interest payments will be automatically granted to these borrowers.

COVID-19 EIDL loans are offered at very affordable terms. The loans provide a 3.75 percent interest rate for small businesses and 2.75 percent interest rate for nonprofit organizations, as well as a 30-year maturity.

The SBA has vowed to make available all previously approved Coronavirus Pandemic stimulus funding and administer the new targeted programs relating to provisions in the 2020 Economic Aid to the Hard-Hit Small businesses, Nonprofits and Venues Act (the Economic Aid Act) as quickly as possible.

“The American people and the nation’s Small Business owners need our tireless effort and dedication to get this essential funding to those in great need, and SBA will not rest until we implement President Biden’s “American Rescue Plan” and its’ additional targeted programs and funds allocated for America’s small business and nonprofit communities,” said SBA Senior Advisor Michael Roth.

In mid-February 2020, the SBA reached a milestone with the COVID-19 EIDL program. It has approved more than $200 billion in emergency funding in low-interest loans, providing working capital funds to small businesses, non-profits and agricultural businesses to survive the severe impacts of this catastrophic and historic period within the entire U.S. and its territories. The SBA continues to approve over $500 million each week for the COVID-19 EIDL program.

If you or your clients have questions about the SBA COVID-19 EIDL and disaster loan payments, email the SBA at [email protected] or call the SBA Customer Service Center at 1-800-659-2955.

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