The U.S. Small Business Administration has announced extended deferment periods for all disaster loans, including the Covid-19 Economic Injury Disaster Loan (EIDL) program, until 2022.
All SBA disaster loans made in calendar year 2020, including Covid-19 EIDL, will have a first payment due date extended from 12-months to 24-months from the date of the note.
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.
The SBA added this initial deferment period was subsequently extended through March 31, 2021. 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, “unless the borrower voluntarily continues to make payments while on deferment”.
The SBA said “it is important to note” that the interest will continue to accrue on the outstanding balance of the loan throughout the duration of the deferment.
SBA administrator Tami Perrillo said: “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.
“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.”
In mid-February 2021, SBA reached a “milestone in the success” of the Covid-19 EIDL program, by approving over $200bn in emergency funding in low-interest loans, providing working capital funds to small businesses, non-profits and agricultural businesses to survive the pandemic.
The SBA revealed it continues to approve over $500m each week for the Covid-19 EIDL program.