Following United States President Joseph R. Biden’s signing the American Rescue Plan Act of 2021 into law on March 12, the U.S. Small Business Administration (SBA) announced extended deferment periods for all Coronavirus (COVID-19) federal disaster loans until 2022.
All SBA disaster loans made in calendar year 2020, including COVID-19 Economic Injury Disaster Loans (EIDL), will have a first payment due date extended from 12-months to 24-months from the date of the note.
All SBA disaster loans made in calendar year 2021, including COVID-19 EIDL, will have a first payment due date extended from 12-months to 18-months from the date of the note.
Existing SBA disaster loans approved prior to 2020 in regular servicing status as of March 1, 2020, received an automatic deferment of principal and interest payments through December 31, 2020. This initial deferment period was subsequently extended through March 31, 2021. An additional 12-month deferment of principal and interest payments will be automatically granted to these borrowers. Borrowers will resume their regular payment schedule with the payment immediately preceding March 31, 2022, unless the borrower voluntarily continues to make payments while on deferment. It is important to note that the interest will continue to accrue on the outstanding balance of the loan throughout the duration of the deferment.
COVID-19 EIDL loans are offered for a 30-year maturity terms at a 3.75 percent interest rate for small businesses and 2.7 percent interest rate for not-for-profit organizations.
The American Rescue Plan Act provides additional relief for the nation’s small businesses and hard-hit industries for programs the SBA is currently administering and adds new efforts, including:
- $7.25 billion additional for the Paycheck Protection Program, including to expand eligibility to additional nonprofits and digital news services;
- Additional funds are allocated for the Shuttered Venue Operators Grant(SVOG) program, and now allows businesses to apply for both a PPP loan after Dec. 27, 2020, and the SVOG;
- $15 billion additional for Targeted Economic Injury Disaster Loan Advance(EIDL) payments, including NEW $5 billion for Supplemental Targeted EIDL Advance payments for those hardest hit;
- NEW:$28.6 billion for the Restaurant Revitalization Fund for industry-focused grants; and
- NEW:$100 million to establish a Community Navigator pilot program; grants will go to eligible organizations supporting efforts to improve access to COVID–19 pandemic assistance programs and resources.
The SBA’s current relief efforts can be found at www.sba.gov/coronavirusrelief, and more details about these program updates and new efforts the SBA will administer in the coming weeks.