Key Policy Change to Existing COVID Economic Disaster Loan Program


Tue 15 March 2022 1:00 p.m.

Borrowers will benefit from an additional deferral

√ Effective immediately, the agency is providing additional relief for small businesses

On Tuesday, Administrator Isabella Casillas Guzman, head of the U.S. Small Business Administration, ordered the SBA to provide additional deferral of principal and interest payments for existing borrowers in the COVID Economic Injury Disaster Loan (EIDL) program. This makes a total of 30 months of deferral since the start of all approved EIDL COVID-19 loans.

A press release noted, “The extended adjournment period will provide additional flexibility for small business owners impacted by the pandemic, particularly those in hard-hit sectors who are dealing with disruptions with recent variants, as well as recent challenges of supply chain and inflation amid growing economic recovery. .”

Since its inception, the EIDL program, a federal disaster relief loan, has allocated more than $351 billion in emergency assistance to 3.9 million borrowers, including the smallest businesses in communities historically underserved and disadvantaged.

“While our small business owners continue to fuel 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 make sure they can recover and thrive,” Guzman said. . “This extended deferral of principal and interest will provide financial relief to millions of small business owners – especially those hardest hit by the pandemic and related market challenges – so they can carry on. to pivot, adapt and grow.”

Key information about the postponement

√ This deferral extension is effective for all EIDL loans approved in calendar years 2020, 2021 and 2022. Loans now have a total deferral of 30 months from the date of the note. Interest will continue to accrue on the loans during the deferral.

√ Borrowers can make partial or full payments during the deferral period, but they are not required to do so. The SBA recommends using

√ The SBA will not send SBA Form 1201 monthly payment notices; however, the SBA will send regular payment reminders via email.

√ Existing EIDL borrowers can find account balances and payment due dates in the SBA Capital Access financial system, and learn how to create an account in the CAFS system by logging into Capital Access Financial System ( .

√ Deferrals may result in lump sum payments. The deferral will not stop any pre-authorized debit (PAD) set up or any recurring payments on the loan. EIDL borrowers with an SBA-established PAD should contact their SBA service center to stop recurring payments during the extended deferral period. EIDL borrowers who have established a DPA through Pay.Gov or any other bill payment service are responsible for ending recurring payments during the extended deferment period.

√ After the end of the deferment period, EIDL borrowers will be required to make regular payments of principal and interest commencing 30 months from the date of the note.

“This new action taken by the SBA and Administrator Guzman will give the smallest of small businesses more flexibility to recover and regain their pre-COVID strength. By extending the COVID EIDL deferment period, small businesses will be able to use the capital raised through sales to grow their businesses when it matters most,” added Marlene Cintron, regional administrator for SBA Atlantic, who oversees operations for the l federal agency in New York, New Jersey, Puerto Rico and the US Virgin Islands.

Last September, Guzman announced major enhancements to the EIDL program. The main changes included:

√ Increased EIDL ceiling. The SBA lifted the EIDL cap from $500,000 to $2 million. Loan funds can be used for all normal operating expenses and working capital, including payroll, equipment purchases and debt repayment.

√ Implementation of a deferred payment period. The SBA ensured that small business owners did not have to start EIDL repayment until two years after the loan was issued so that they could continue operating during the pandemic without having to worry about make ends meet.

√ Implementation of a 30-day exclusivity window. To ensure Main Street businesses have more time to access these funds, the SBA has implemented a 30-day exclusivity window to approve and disburse funds for loans of $500,000 or less. . Approval and disbursement of loans over $500,000 began after the 30-day period ended.

√ Expand eligible use of funds. The SBA authorized the use of EIDL funds to prepay commercial debt and make payments on federal corporate debt.

√ Simplification of membership conditions. To make the EIDL application process easier for small businesses, the SBA has established simplified membership requirements to model those of the Restaurant Revitalization Fund (RRF).

Improvements to the application process and fraud control

In addition to policy enhancements, the SBA has invested in optimized processes and increased capacity to improve the customer service experience for candidates.

The agency said: “Led by Administrator Guzman to rapidly and radically improve COVID EIDL, the revamped leadership team implemented new processes and performance management, such as staff prioritization for COVID EIDL and the increase in the average number of enforcement decisions taken. At the time, the SBA accelerated the daily processing of loan increases from nearly 2,000 applications to more than 37,000 applications. Loan officer productivity also increased from 1.86 requests per day to 15 requests per day. With these increased loan review rates, the backlog of over 600,000 loan increase applications was cleared and new applications were processed immediately.

“At the same time, and to ensure that taxpayer dollars are used to support businesses that need COVID EIDL funding the most, the SBA has strengthened fraud checks and is working with the Inspector General from the SBA to closely monitor the program.”

More details for SBA customers

Borrowers with questions can call the SBA’s EIDL Customer Service Center toll-free at 1-833-853-5638 (borrowers who are deaf, hard of hearing or have a speech impairment can dial 7-1-1 to access telecommunications relay services) or e-mail [email protected] for additional help. The center is open from 8 a.m. to 8 p.m. Monday to Saturday. Multilingual representatives are available. Small business owners can also contact SBA resource partners by visiting For more information about EIDL, visit

About COVID-19 Economic Disaster Loans

In response to COVID-19, small business owners – including agricultural businesses and nonprofits in every US state, Washington, DC and territories – were able to apply for the COVID Economic Disaster Loan -19. The purpose of EIDL is to provide financial assistance to small businesses to meet financial obligations and operating expenses that could have been met had the disaster not occurred.

To learn more, visit


About Author

Comments are closed.