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Deferment on COVID EIDL Loans Extended to 30 Months

  • Small Business Administration extends deferment period for COVID Economic Injury Disaster Loans to 30 months
  • Loans under the program previously had a deferment period of 18 or 24 months
  • Extension aims to give small businesses more flexibility as they grapple with COVID-19 variants, inflation, and supply chain issues

By Dirk Langeveld

Borrowers who received a COVID Economic Injury Disaster Loan can defer their payments for an additional six to 12 months under a program update recently announced by the Small Business Administration.

SBA Administrator Isabella Casillas Guzman says principal and interest payments on COVID EIDL loans approved in the 2020, 2021, or 2022 calendar years will not need to make payments until 30 months after the inception of the loan. Some of these loans had an 18-month deferment period while others had a 24-month deferment period.

Interest will continue to accrue during the deferment period, and regular payments must begin after the culmination of the deferment. Borrowers who wish to begin repaying their loan will not face any prepayment penalties.

The SBA says the extension of the deferment payment is meant to offer small businesses additional flexibility as they continue to cope with a variety of challenges, including new COVID-19 variants, inflation, and supply chain disruptions.

Set up to assist small businesses reeling due to the COVID-19 pandemic, the COVID EIDL program raised its cap from $150,000 to $500,000 in March 2021, and six months later increased it again to $2 million. The loans have a 30-year term and interest rates of 3.75 percent for small businesses and 2.75 percent for nonprofits.

The SBA won’t send its Form 1201 payment notice during the deferment payment, but will e-mail regular payment reminders during this time. The agency recommends that COVID EIDL borrowers wishing to start repayment of their loans use to do so, as well as the SBA Capital Access Financial System to review balances and payment due dates.

Preauthorized debit or recurring payments on the loans will still take place unless the borrower contacts an SBA servicing center to stop them. The agency also cautions that the deferment could result in balloon payments.

The SBA accepted COVID EIDL applications until the end of 2021. According to the agency’s latest report, it has approved 3.9 million loans totaling $350.72 billion.

Borrowers can contact the SBA for further information by calling 1-833-853-5638 or e-mailing

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