Payments on Economic Injury Disaster Loans (EIDL) don’t need to be made until 2022, per a recent announcement by the Small Business Administration (SBA). Deferment periods for all the SBA’s disaster loans have been extended; the extended deferment period for your EIDL loan depends on what year the loan was taken out.
If your small business received an SBA disaster loan in 2020, your first payment is due 24 months (originally 12 months) from the date you made the loan. If your small business received an SBA disaster loan in 2021, your first payment is due 18 months (originally 12 months) from the date you made the loan.
Disaster loans approved before 2020 that were in regular servicing status when the pandemic began, officially March 1, 2020, will also receive a third deferral extension. The SBA will allow an additional 12 month deferment of principal and interest payments.
If your business has a disaster loan that is covered by this deferment, keep in mind that delayed payments are optional and that interest will continue to accrue on your balance if you choose to defer payments. You can keep making voluntary payments even though you aren’t required to to avoid paying extra interest later on.
More than 3.7 million small business and nonprofit organizations have received EIDL loans during the pandemic, equalling more than $200 billion. These 30-year loans from the SBA came with interest rates of 3.75% for small businesses and 2.75% for nonprofits.
For help figuring out how your small business can best pay off your EIDL loan, contact Insogna CPA for personalized counsel. The past year has been tough—our expert team for accounting in Austin will help you address immediate needs while also developing a plan for your business’s future growth.