During COVID-19, the Economic Injury Disaster Loan (EIDL) was established by the CARES Act (Coronavirus Aid, Relief, and Economic Security) to help small businesses that were facing economic hardship. Many small businesses faced shut downs and loss of revenue during that period and therefore were allowed to take out an EIDL. These payments have been deferred during these difficult times, while still accruing interest on the principal loan amount. However, the Small Business Administration (SBA) announced in March 2021 that regular payment schedules will resume on March 21, 2022. Borrowers still can make voluntary payments during this deferment period if they so choose.
The SBA had previously approved disaster loans prior to 2020 but as of March 2020 those loans, principal and interest, had automatically been deferred through December 2020. That was then extended through March 2021 and more recently was deferred for another 12 months automatically to borrowers.
Tami Perrillo is an SBA Administrator and in a press release explained that many small businesses of all kinds suffered a lot of hardships due to the COVID-19 pandemic and continue to suffer. The EIDL program has helped not only small businesses but also nonprofits, agricultural enterprises, self-employed individuals, independent contractors, sole proprietors, and gig workers from many industries through these challenging times. In fact, they have assisted over 3.7 million small businesses during not only the COVID-19 Pandemic, but also the severe winter storms that came through in 2020.
The EIDL Loans provided a low interest rate of 3.75% for small businesses and an even lower rate of 2.75% for non-profits. They also offered a long loan maturity of 30 years.
The SBA now has the 2020 Economic Aid to the Hard-Hit Small businesses, Nonprofits and Venues Act (Economic Aid Act) and has promised that previously approved COVID-19 stimulus funding, as well as new targeted provision programs will be made available as quickly as possible.
Michael Roth, an SBA Senior Advisor, also explained that the SBA does not intend to rest, but continue to work tirelessly for America’s Small Businesses by implementing President Biden’s “American Rescue Plan” as well as the targeted programs and funds in order to help small businesses and nonprofits in the US.
The SBA approved over $200 billion in low-interest loans for emergency funding in February of 2020. This provided relief through working capital for: small businesses, nonprofits, and agricultural businesses in order to help them survive the hardships of the pandemic. Even now the SBA is approving over $500 million each week under the EIDL program.
If you or your clients have questions about the SBA COVID-19 EIDL and disaster loan payments, you can email the SBA directly at DisasterCustomerService@sba.gov or call the SBA Customer Service Center at 1-800-659-2955. However, if you need more help understanding this or knowing if it applied to you we would love to help! Contact us to see if the services we offer are right for you. We can be reached at 310-534-5577 or email@example.com.
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