Small businesses to receive extra deferment of COVID loans
Courtesy | U.S. Small Business Administration
Isabella Casillas Guzman serves as administrator of the U.S. Small Business Administration.
Isabella Casillas Guzman, administrator of the U.S. Small Business Administration, announced additional deferment of principal loans and interest payments for those businesses who received relief under the COVID Economic Injury Disaster Loan program.
Borrowers will now receive 30 months of deferment from inception on all approved COVID EIDL loans. After the extended deferment period ends, COVID-EIDL borrowers will be required to make regular principal and interest payments beginning 30 months from the date of the note.
Enacted in December 2020 in response to the pandemic’s impact on small businesses, the goal of EIDL was to provide financial assistance for small businesses to meet financial obligations and operating expenses that could have been met had the disaster not occurred, according to a Tuesday announcement.
The COVID EIDL program has allocated more than $351 billion in relief aid to 3.9 million borrowers, including to the smallest of small businesses from historically underserved, disadvantaged communities.
In September, SBA made major enhancements to the COVID EIDL program, which included an increased COVID EIDL cap from $500,000 to $2 million, a 30-day exclusivity window, expansion of eligible use of funds, and simplification of affiliation requirements.
“This extended principal and interest deferment will provide financial relief to millions of small business owners – particularly those hardest-hit by the pandemic and related marketplace challenges – so they can continue to pivot, adapt, and grow,” Guzman said in a press release.
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