Relief is on the way for small businesses

Home Columns Al's Column Relief is on the way for small businesses

small businessesBy Reginald Tucker—Specialty retailers, contractors and other small businesses involved in the floor covering industry who received EIDL funding during the height of the pandemic will now be able to defer payments for a total of 30 months from inception on all approved COVID-19 EIDL loans. The extended deferment period will provide additional flexibility to small business owners impacted by the pandemic, especially those in hard-hit sectors managing disruption with recent variants, as well as recent supply chain and inflation challenges amid an economic recovery.

Since its inception, the COVID-19 Economic Injury Disaster Loan program, a federal disaster relief loan, has allocated more than $351 billion in relief aid to 3.9 million
borrowers. “Though our small business owners continue to power a historic economic recovery under the Biden-Harris Administration, we must continue to do everything in our power to meet our small businesses where they are with resources to ensure they can recover and thrive,” said Isabella Casillas Guzman, SBA administrator. “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.”

This deferment extension is effective for all COVID-19 EIDL loans approved in calendar years 2020, 2021 and 2022. Loans now have a total deferment of 30 months from the date of the note. Interest will continue to accrue on the loans during the deferment. In addition, borrowers may make partial or full payments during the deferment period but are not required to.

The SBA will not send monthly SBA Form 1201 payment notices; however, the SBA will send regular payment reminders via email. Also, existing COVID-19 EIDL borrowers can find account balances and payment due dates in the SBA Capital Access Financial System (CAFS) and learn how to set up an account in the CAFS system by logging in at

SBA warns that deferments may result in balloon payments. To that end, the deferment will not stop any established preauthorized debit or recurring payments on the loan. COVID-19 EIDL borrowers with an SBA established preauthorized debt must contact their SBA servicing center to stop recurring payments during the extended deferment period. Furthermore, COVID-19 EIDL borrowers who have established a preauthorized debit through Pay.Gov or any other bill pay service are responsible for terminating recurring payments during the extended deferment period. After the deferment period ends, borrowers will be required to make regular payments beginning 30 months from the date of the mote. The deferment program is the latest in a series of adjustments to the EIDL loan program. In September 2021, SBA announced a new round of changes. First and foremost, it lifted the cap from $500,000 to $2 million. Loan funds can be used for any normal operating expenses and working capital, including payroll, purchasing equipment and paying off debt.

Next, SBA implemented a deferred payment period. SBA ensured small business owners did not have to begin COVID-19 EIDL repayment until two years after loan origination so that they could continue operating during the pandemic without having to worry about making ends meet.

SBA then established a 30-day exclusivity window, approving and disbursing funds for loans of $500,000 or less. This helped ensure Main Street businesses had additional time to access these funds. Approval and disbursement of loans over $500,000 began after the 30-day period ended.

Lastly, SBA expanded the eligible use of funds to be used to prepay commercial debt and make payments on federal business debt.

Visit for more details on how to facilitate deferments on the EIDL loans.

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March 21, 2022

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