New Guidance Surrounding Economic Injury Disaster Loan Payments

Small businesses and nonprofits that received COVID-19 Economic Injury Disaster Loans (EIDL) may defer making payments on the loans until 2022, the U.S. Small Business Administration (SBA) announced on March 12, 2021.

The extended deferment periods apply to all disaster loans made by the SBA in 2020 and 2021, including the COVID-19 EIDL loans. However, the deferral details differ depending on the calendar year the disaster loan was made.

  • For SBA disaster loans made in 2020, the first payment due date is 24 months (extended from 12 months) from the date of the note.
  • For all SBA disaster loans made in 2021, the first payment due date is 18 months (extended from 12 months) from the date of the note.
  • The SBA also granted an additional 12-month deferment of principal and interest payments for existing disaster loans approved prior to 2020 that were in regular servicing status as of March 1, 2020. This is the third deferral extension for those loans. The SBA granted an automatic deferral of principal and interest payments through Dec. 31, 2020, and then extended the deferral period through March 31, 2020. The latest deferral means that borrowers don’t have to resume their regular payment schedule until the payment immediately preceding March 31, 2022.

Borrowers may voluntarily continue to make payments during the deferment, as interest will continue to accrue on the outstanding loan balance during this period.

The SBA has approved more than $200 billion in COVID-19 EIDL loans to more than 3.7 million small businesses and nonprofit organizations. The loans have a 30-year maturity with interest rates of 3.75% for small businesses, including sole proprietors and independent contractors, and 2.75% for nonprofits.

If you have questions about an active SBA disaster loan, please contact your Adams Brown advisor.