On March 15, 2022, the federal Small Business Administration (SBA) announced additional relief to COVID-19 Economic Injury Disaster Loan (EIDL) recipients. Existing borrowers will have their loan deferment periods automatically extended to a total of 30 months from the loan’s inception. This means principal payments will not be due until 30 months after the date the loan was issued (the date of the Note).
What Is the EIDL and How Did It Help Small Businesses During COVID-19?
This EIDL program was a federal small business loan program that issued accessible, borrower-friendly loans to offset the impact of COVID-19 shutdowns and pandemic effects. It allocated more than $351 billion in relief aid to 3.9 million borrowers, including small businesses in historically underserved, disadvantaged communities. Although the program is no longer taking new applications, it continues to accept requests for increases, reconsideration, and appeals for existing loans.
What Does the New Deferment Announcement Mean for Borrowers?
The extended deferment period provides additional flexibility to small business owners still suffering financial setbacks caused by the pandemic. Recent variants, supply chain issues, and inflation challenges have made recovery challenging for many small businesses.
This deferment extension is automatically effective for all outstanding COVID-Economic Injury Disaster Loans approved in calendar years 2020, 2021, and 2022. All approved loans now have a total deferment period of 30 months from the date they were issued.
Interest will continue to accrue on the loans during the deferment period. Borrowers may make payments on the loan during the deferment period without jeopardizing or otherwise affecting the extension. At the end of the deferment period, 30 months after the date of the Note, borrowers must begin to make their regular principal and interest payments.
Existing COVID EIDL Borrowers can set up an account, check their loan balance, confirm payment due dates, and make payments using the Capital Access Financial System (CAFS).