SBA Extends Disaster Loan Repayment Deadlines
Small businesses that received a disaster loan from the U.S. Small Business Administration in 2020, including a COVID-19 Economic Injury Disaster Loan, will not have to begin paying it back until 2022.
The SBA announced the deadline extension because many small businesses are still reeling from the impact of the coronavirus pandemic.
Under the deferment:
- All SBA disaster loans made in calendar year 2020, including COVID EIDLs, will have the first payment due date extended from 12 months to 24 months from the date of the note
- All SBA disaster loans made in calendar year 2021, 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 in regular servicing status as of March 1, 2020 received an automatic deferment of principal and interest payments through Dec. 31, 2020.
This initial deferment period was extended through March 31, 2021 but an additional 12-month deferment of principal and interest payments will be automatically granted to these borrowers, the SBA said.
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 notes that interest will continue to accrue on the loan’s outstanding balance through the duration of the deferment.
An EIDL is a low interest loan—3.75% for small businesses, 2.75% for nonprofits—with terms up to 30 years and the first payment deferred for one 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 questions on SBA EIDL payments, email the SBA or call 800.659.2955.
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