EIDL Loan Payments Deferred Until 2022

eidl Mar 17, 2021

Today, the SBA announced an update to the EIDL Loan program that will be welcome news for small business owners: loan payments for any disaster loan, including the EIDL program, are deferred until 2022. Here’s what you need to know about the news and how to apply for the EIDL if you haven’t already.

In addition, Isabel Guzman was confirmed in the Senate today. During the hearing many Senators renewed their push for increases to the $150,000 EIDL Loan limit as well as $10,000 EIDL grants for everyone who has applied and is eligible. Ms Guzman has been seen as favorable to changes like this — changes that would help more small business owners.

Today's video below talks about both of these major changes — EIDL loan payments deferral and the confirmation of Isabel Guzman to lead the SBA and distribution of both EIDL and PPP programs.

How Long Will EIDL Loans Be Deferred?

Business owners who received an EIDL loan in 2020 will have their first payment due 24 months after the date of receiving their loan. Those who received their loan in 2021 will have their first payment due 18 months after receiving their loan. In short, no business owners who received a loan in 2020 will have to make a payment before 2022.

Meanwhile, those who received their loans prior to the pandemic (before March 1 of 2020) have had their payments deferred until March 31 of 2022.  This flexibility from the SBA will grant business owners the opportunity to prepare and rebuild over the next year before they need to begin paying back their loans.

Should You Pay Earlier If You Can?

It’s important to note that the deferment period doesn’t suspend interest on EIDLs, only required payments. So if you can make payments on your loan, even minimal ones, it might be worth doing so to avoid interest accruing over the next year (or two). The SBA will allow borrowers to make even partial payments during the deferment period.

What Interest Rates Do EIDLs Have?

EIDLs for small businesses have a 3.25% interest rate (for nonprofits, the rate is 2.75%). EIDL loans have a 30-year maturity, which means borrowers’ final loan payment will be due thirty years after they received their loan. The SBA’s loan terms are lower than most commercial borrowers, but of course, like any loan, they have some financial impact.

How Can You Apply For an EIDL?

If you haven’t received an EIDL yet, it’s not too late to apply! The current maximum loan amount for an EIDL is $150,000.  However, during Isabel Guzman's SBA Confirmation Hearing today, as mentioned in above video, a few Senators renewed their effort to increase the $150,000 EIDL limit.

EIDL Loans are open for applications until December 31 of 2021. Regular EIDL loans will remain open after that date for people experiencing specific disaster-related circumstances, like hurricanes or severe storms. The EIDL application is available online here.

Conclusion: Now is a Good Time to Apply for an EIDL

Many business owners have been disappointed by the narrow eligibility requirements for the Targeted EIDL Advances (grants from the SBA). The EIDL is a good alternative. Although it does need to be repaid eventually, an  EIDL can provide up to $150,000 in working capital for businesses in need, and payments have been deferred until 2022. You can apply for the EIDL on the SBA website.

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