SBA Provides COVID EIDL Borrowers Additional Deferment
The U.S. Small Business Administration (SBA) recently announced that it is providing additional deferment of principal and interest payments for existing COVID Economic Injury Disaster Loan (EIDL) program borrowers for a total of 30 months deferment from loan inception.
The extension is effective for all COVID EIDL loans approved in calendar years 2020, 2021 and 2022. Interest will continue to accrue on the loans during the deferment period, and borrowers may make partial or full payments during the deferment period if they wish.
The SBA stated that it will not send monthly SBA Form 1201 payment notices during the deferment period; however, the SBA will send regular payment reminders via email.
The agency noted that deferment will not stop any established Preauthorized Debit (PAD) or recurring payments on loans. Borrowers with an SBA-established PAD must contact their SBA servicing center to stop recurring payments during the extended deferment period. Borrowers who have established a PAD through Pay.Gov or another bill pay service are responsible for terminating recurring payments during the extended deferment period.
Once the deferment period ends, 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 EIDL program has allocated more than $351 billion in relief aid to 3.9 million borrowers, including small businesses from historically underserved, disadvantaged communities. The SBA stated that the extended deferment period will provide additional flexibility to small business owners impacted by the pandemic and recent supply chain and inflation challenges.
For more information, visit www.sba.gov/relief.