The U.S. Small Business Administration announced extended deferment periods for all disaster loans, including the COVID-19 Economic Injury Disaster Loan (EIDL) program. Small businesses won’t have to start making payments on the loan until 2022.
In a news release issued on March 12th, Friday evening, the SBA announced extended deferment periods for all of its disaster loans, including the COVID-19 EIDL loans. The deferral details differ depending on the calendar year the disaster loan was made.
- For all 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.
References;
SBA PRESS RELEASE | March 12, 2021 | Release Number 21-20
https://www.sba.gov/article/2021/mar/12/sba-extends-deferment-period-all-covid-19-eidl-other-disaster-loans-until-2022
Disclaimer
This article is intended for informational purposes and should not be taken as legal or tax advice. You must consult with your tax, financial or legal adviser about your unique financial situation before acting on anything discussed in this article. TaxBasket LLC is providing informational content for general guidance to help small business owners become more aware of certain issues and topics and this article must never be considered as a substitute for advice provided by your tax, financial or legal advisers. TaxBasket LLC or its members cannot be held liable for any use or misuse of this content.
