Deferment Period Extended for Disaster Loans to 2022
Small businesses that received an Economic Injury Disaster Loan (EIDL) have more time to pay them. The US Small Business Administration (SBA) has extended the deadline to 2022 for borrowers to meet their obligations under the disaster loans.
All SBA disaster loans made in calendar year 2020, including COVID-19 EIDL, will have a first payment due date extended from 12-months to 24-months from the date of the note. And all SBA disaster loans made in calendar year 2021, including COVID-19 EIDL, will have a first payment due date extended from 12-months to 18-months from the date of the note.
Existing loans that were approved prior to 2020 received an automatic deferment of principal and interest payments through December 31, 2020. This initial deferment period was then extended through March 31, 2021. An extra 12-month deferment of principal and interest payments will now be automatically granted to these borrowers. Unless the borrower voluntarily continues to make payments while on deferment, borrowers will resume their regular payment schedule with the payment immediately preceding March 31, 2022.
Be aware, interest will continue to accrue on the outstanding balance of the loan throughout the duration of the deferment.
COVID-19 EIDL loans are offered at a 3.75% interest rate for small businesses and 2.75% interest rate for nonprofits, with a 30-year maturity on the loan. Borrowers can make full or partial payments if they choose.
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