SBA again extends deferral period for EIDL payments

The U.S. Small Business Administration (SBA) has extended the COVID-19 Economic Disaster Loan (EIDL) payment deferral period for the third time in 12 months.

In a press release, the SBA said small businesses and nonprofits that have received funds from EIDL do not have to begin payments on the loan until 30 months after the date of the note. . Interest will continue to accrue on the loans during the deferral period. EIDL borrowers can make prepayments on their loans.

Tuesday’s announcement came exactly a year after the SBA extended the deferral period from 12 months to 18 months for loans made in 2021 or 24 months for loans made in 2020. In September, the SBA unveiled several major changes to the program, including an extension of the deferral period for EIDL 2021 payments to 24 months as part of a series of major changes aimed at broadening the attractiveness of the program.

The EIDL program has allocated more than $351 billion in low-interest loans to 3.9 million small businesses and nonprofits. The loans have a 30-year term with interest rates of 3.75% for small businesses, including sole proprietors and independent contractors, and 2.75% for non-profit organizations.

Recipients can use the funds for all normal operating expenses and working capital, including payroll, purchasing equipment, and paying debt. Funds may also be used to prepay commercial debt and make payments on federal commercial debt.

AICPA experts discuss the latest news on the COVID-19 EIDL and other small business relief programs at a virtual town hall held every two weeks. The webcasts, which provide CPE credits, are free for AICPA members and $39 for non-members. Go to the AICPA Town Hall Series web page for more information and to register. Town hall records are available free of charge on AICPA TV.

the AICPA Paycheck Protection Program Resource Page houses resources and tools produced by the AICPA to help deal with the economic impact of the coronavirus.

— To comment on this article or suggest an idea for another article, contact Jeff Drew at [email protected].

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