WASHINGTON, D.C. (WWTI) — On Friday, the Small Business Administration extended the deferment period for all disaster loans until 2022. This included the COVID-19 Economic Injury Disaster Loan program.
According to the SBA, all disaster loans made during 2020, including COVID-19 EIL, will have a first payment due date extended from 12-months to 240months from the date of note. Additionally, all SBA disaster loans made in 2021, will have an extension from 18-months from the date of note.
Previously, 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 the end of 2020. This deferment period was then extended through March 31, 2021.
The SBA stated that an additional 12-month deferment will now be granted to these borrowers and they will resume their regular payment schedule starting March 31, 2022.
“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,” stated SBA Acting Administrator Tami Perrillo. “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.”
The SBA added that although borrowers will resume payments in 2020, they can voluntarily make payments if chosen, on deferment. Additionally, interest will continue to accrue on the outstanding balance of the loan throughout deferment.
This additional extension was announced by the U.S. Small Business Administration on March 12, 2021.