There is good news for small businesses and nonprofits that received Economic Injury Disaster Loan (EIDL) funds. The U.S. Small Business Administration (SBA) has extended the deferment period for COVID-19 EIDL payments for the third time in 12 months.
The extension is effective for all COVID-19 EIDL funds approved in calendar years 2020, 2021, and 2022.
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. However, interest will continue to accrue on the loans during the deferment period. EIDL borrowers can make early payments on their loans.
The EIDL program has allocated more than $351 billion for low-interest loans to almost 4 million borrowers. 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.
The loan may be used for operating expenses and working capital, such as meeting payroll, purchasing equipment, and paying debt. In addition, the loan may be used to prepay commercial debt and to make payments on federal business debt.
Contact us if you have any questions about EIDL funds and applying them to your business.