The Small Business Administration (SBA) this week extended the deferment period for COVID-19 Economic Injury Disaster Loan (EIDL) borrowers to 30 months from when the loan was first approved.
The EIDL program has provided nearly four million small businesses and nonprofit organizations more than $350 billion in emergency funding during the pandemic. EIDL loans can be used to pay fixed debts, payroll and expenses and other bills.
The program ended Dec. 31, 2021 but the SBA-announced extension on loan repayments applies to all EIDL loans approved since 2020. Some loans previously had deferment periods for either 18 months or 24 months. EIDL borrowers will still have to pay interest of around 3 percent on the loans. EIDL recipients can make partial or full payments during the deferment period but are not required to.
“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,” said 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.”
Last week, Senate Small Business Committee Chair Ben Cardin (D-MD), Sens. Raphael Warnock (D-GA), Mark Kelly (D-AZ), Catherine Cortez Masto (D-NV) and 12 of their colleagues sent a letter urging the SBA to extend the deferment period.
“This is welcome relief for American small businesses,” Cardin said this week after the SBA announcement. “Washington cannot mistake our signs of recovery for proof that small businesses have recovered from the pandemic. Millions of small businesses, especially restaurants, bars and other hard-hit sectors, are being sandwiched between past due bills and increasing supply and labor costs. I applaud the SBA for this extension, which will provide small businesses with additional flexibility to keep their doors open and make it through the pandemic.”