The US Small Business Administration (SBA) has extended the deferment period for COVID-19 Economic Injury Disaster Loan (EIDL) payments for the third time in 12 months.
In a news release, the SBA said that small businesses and not-for-profits that received EIDL funds do not have to begin payments on the loan until 30 months after the date of the note. Interest will continue to accrue on the loans during the deferment period. EIDL borrowers can make early payments on their loans.
The announcement Tuesday came exactly one year after the SBA had lengthened the deferral period from 12 months to either 18 months for loans made in 2021 or 24 months for loans made in 2020. In September, the SBA unveiled several major modifications to the program, including an extension of the deferral period for 2021 EIDL payments to 24 months as part of a series of major modifications designed to broaden the appeal of the program.
The EIDL program has allocated more than $351 billion for low-interest loans to 3.9 million small businesses and not-for-profits. 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 not-for-profits.
Recipients can use the funds for any normal operating expenses and working capital, including meeting payroll, purchasing equipment, and paying a debt. Funds also can be used to prepay commercial debt and make payments on federal business debt.