Small businesses that received a disaster loan from the US Small Business Administration in 2020, including a COVID-19 economic disaster loan, will not have to start repaying it until 2022.
The SBA announced the extension of the deadline as many small businesses are still reeling from the impact of the coronavirus pandemic.
Under the suspended sentence:
- All SBA disaster loans made during calendar year 2020, including EIDL COVID, will have the due date of the first payment extended from 12 months to 24 months from the date of the note.
- All SBA disaster loans made during the 2021 calendar year, including COVID loans, will have the first payment due date extended from 12 months to 18 months from the date of the note
Existing disaster loans approved before 2020 and with regular service status as of March 1, 2020 have received an automatic deferral of principal and interest payments until December 31, 2020.
This initial deferral period has been extended to March 31, 2021, but an additional 12-month deferral of principal and interest payments will automatically be granted to these borrowers, the SBA said.
Borrowers will resume their regular payment schedule with payment immediately preceding March 31, 2022, unless the borrower voluntarily continues to make payments during the deferral.
The SBA notes that interest will continue to accrue on the outstanding loan balance for the duration of the deferral.
An EIDL is a low-interest loan – 3.75% for small businesses, 2.75% for nonprofit organizations – with terms of up to 30 years and the first deferred payment of a year.
More than 3.7 million small businesses, including sole proprietorships and independent contractors, have been helped by the COVID-19 EIDL program, the SBA said.
If you have any questions about SBA EIDL payments, email the SBA or call 800.659.2955.