Some good news for businesses who took out Covid Economic Injury Disaster (EIDL) loans: the Small Business Administration is extending deferment periods for disaster loans once again.
With no further Covid-related relief funds from Congress in sight, the SBA is allowing those who sought disaster loans from the Covid-relief program to extend the deferment period for 30 months from when the loan was first approved. Those seeking this deferment will still need to pay interest–around 3 percent–on the loans, which is generally considered inexpensive.
The extension applies to all EIDL loans approved since 2020. Some disaster loans previously had deferment periods for either 18 months or 24 months.
SBA Administrator Isabel Guzman said in a Tuesday statement that the extended deferment for the loans will help millions of small business owners.
The announcement arrives just days after a group of 16 senators asked the SBA to extend the deferment period. In their letter, the senators emphasized the challenges that small businesses faced amid the surge of the Omicron variant, which include staffing crunches and drops in revenue. Those same challenges continue to linger for many businesses today.
Senator Ben Cardin (D-MD), who chairs the small business and entrepreneurship committee in the Senate, praised the SBA’s decision to extend the deferment period. “Washington cannot mistake our signs of recovery for proof that small businesses have recovered from the pandemic,” Cardin said in a statement. “Millions of small businesses, especially restaurants, bars, and other hard-hit sectors, are being sandwiched between past due bills and increasing supply and labor costs.
The EIDL program has dispensed more than $351 billion worth of relief to nearly 4 million borrowers, according to the SBA. The SBA did not immediately respond to Inc.‘s request for comment.