On Tuesday, the Small Business Administration announced in a press release that Economic Injury Disaster Loan (EIDL) borrowers now have more time to make their first EIDL payment. The first payment due date is now 30 months after EIDL loan origination, previously it had been 24 months. Here's the important news from the SBA press release.

Current EIDL Borrowers Receive Extended Deferment

In a press release from SBA Administrator Isabel Guzman, the SBA stated that current EIDL borrowers will receive an extension to their repayment deferment. For example, if your EIDL loan originated in May 2020, your first payment due date is now November 2022 — 30 months from your loan origination date.

• The deferment extension is for all approved EIDL loans in 2020, 2021, and 2022. Repayments will begin 30 months after the date of the Note.
• You can still make payments during the deferment period, but you are not required to.
• The SBA will send monthly payment reminders via email but will not be sending SBA Form 1201 payment notices.
• If you established a Preauthorized Debit (PAD) or recurring payments on your loan, contact your SBA servicing center to stop them during the extended deferment period — or do it yourself, if you used Pay.gov or another bill pay service.
• EIDL payments — including interest and the principal balance — will begin 30 months after the date of your Note.  

The press release stated that this extension "will provide additional flexibility to small business owners impacted by the pandemic...as well as recent supply chain and inflation challenges amid a growing economic recovery."

SBA Could Exhaust EIDL Funds by End of April

Recently we reported that according to a source at the SBA, the SBA is awarding about $1B in funding per day. At the time, there was reported to be $41 billion in EIDL funding remaining — substantially lower than the $100B in funding that was reported only a few months ago.

Several factors affect the rate that the SBA distributes EIDL funds — such as the number and amount of outstanding EIDL loans awaiting approval and others — so the exact date that EIDL funds will run out may fluctuate.

We created an EIDL countdown timer and adjust it as we receive more information from the SBA. At the current pace, the SBA could run out of EIDL funds in just under 30 days.

Businesses have two years from the origination date to request an increase and six months from the date of denial to request reconsideration — but the SBA will likely run out of funds soon. If you have been waiting to apply for reconsideration or an increase, now is the time to do it.

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