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SBA introduces additional deferment on COVID-19 loans
Ioannis Pashakis//March 15, 2022//
The U.S. Small Business Administration (SBA) announced it will be extending deferment on its loan program for small businesses’ recovering from the impacts of COVID-19.
The deferment extension is effective for all COVID Economic Injury Disaster Loans approved in 2020, 2021 and 2022. The loans now have a total deferment of 30 months from the date that the borrower received the loan.
Interest will continue to accrue on the loans during the deferment.
The extended deferment period will provide additional flexibility to small business owners impacted by the pandemic, especially those in hard-hit sectors, the administration wrote in a statement on Tuesday.
“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 SBA Administrator Casillas Guzman. “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.”
Borrowers through the program can make partial or full payments during the deferment period. After the period ends, borrowers will be required to continue making regular principal and interest payments.
The SBA made a number of changes to the COVID Economic Injury Disaster Loan program in 2021.
Those changes included lifting the loan cap from $500,000 to $2 million, implementing a deferred payment period, expanding the eligible use of funds and establishing a 30-day exclusivity window.
