Some good news for companies that have taken Covid Economic Injury Disaster (EIDL) Loans: The Small Business Administration is once again extending deferral periods for disaster loans.
With no other Congressional Covid-related relief funds in sight, the SBA is allowing those who have applied for Covid Relief Program disaster loans to extend the deferment period by 30 months from the first loan approval. Those requesting this deferral will still have to pay interest – around 3% – on the loans, which is generally considered inexpensive.
The extension applies to all EIDL loans approved since 2020. Some disaster loans previously had deferment periods of 18 months or 24 months.
SBA Administrator Isabel Guzman said in a statement Tuesday that the extended loan deferral would help millions of small business owners.
The announcement comes just days after a group of 16 senators asked the SBA to extend the adjournment period. In their letter, The senators pointed to the challenges that small businesses faced as the Omicron variant ramped up, including staffing shortages and revenue declines. These same challenges persist for many companies today.
Sen. Ben Cardin (D-MD), who chairs the Senate Small Business and Entrepreneurship Committee, welcomed the SBA’s decision to extend the adjournment period. “Washington cannot confuse our signs of recovery with evidence that small businesses have recovered from the pandemic,” Cardin said in a statement. “Millions of small businesses, especially restaurants, bars and other hard-hit sectors, are sandwiched between unpaid bills and rising supply and labor costs.
The EIDL program has provided more than $351 billion in relief to nearly 4 million borrowers, according to the SBA. The SBA did not immediately respond to Inc.request for comment.