On March 15, 2022, Isabella Casillas Guzman, the head of the U.S. Small Business Administration announced that the SBA is providing an additional deferment for existing borrowers of Economic Injury Disaster Loans (EIDL loans).  The additional deferment provides for a total of 30 months deferment of principal and interest payments, from the date of the originally approved COVID-EIDL Loans.

The additional deferment will allow small business owners, who were not only affected by the pandemic and the fallout from supply chain disruptions, a chance to pivot, adapt and grow.

Key information regarding deferment: 

  • This deferment extension is effective for all COVID-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. 
  • Borrowers may make partial or full payments during the deferment period but are not required to. The SBA recommends using pay.gov
  • The SBA will not send monthly SBA Form 1201 payment notices; however, the SBA will send regular payment reminders via email. 
  • Existing COVID 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 Capital Access Financial System (sba.gov).
  • Deferments may result in balloon payments. The deferment will not stop any established Preauthorized Debit (PAD) or recurring payments on the loan. COVID-EIDL Borrowers with an SBA established PAD must contact their SBA servicing center to stop recurring payments during the extended deferment period. COVID-EIDL Borrowers who have established a PAD 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, COVID-EIDL Borrowers will be required to make regular principal and interest payments beginning 30 months from the date of the Note. 

Contact our experienced tax professionals to discuss any questions at info@bkc-cpa.com or call (908) 782-7900.

Learn more about BKC’s Tax Planning & Compliance services here.

Read more helpful Tax Tips here.