If your non-profit has been the recipient of a COVID Economic Injury Disaster Loan, you may now take an additional deferment of principal and interest payments. The Small Business Administration made the announcement on March 15th, which will provide additional flexibility to organizations who have experienced economic challenges due to the pandemic. The extended deferment period is 30 months. Below are the key parameters regarding deferment:
- The determent extension is effective for all COVID-EIDL loans approved in calendar years 2020, 2021, and 2022. Loans now have a total deferment of 30 months from the date of the Note. Interest will continue to accrue on the loans during the deferment.
- Borrowers can make partial or full payments during the deferment period but are not required to.
- The SBA will not send monthly SBA Form 1201 payment notices; however, the SBA will send regular payment reminders via e-mail.
- You can access your account balances and payment due dates (or set up a new account) in the SBA Capital Access Financial System (CAFS).
- Deferments can result in balloon payments. The deferment will not stop any established Preauthorized Debit (PAD) or recurring payments on the loan. Borrowers with an SBA established PAD must contact their SBA servicing center to stop recurring payments during the extended deferment period. Borrowers who have set up a PAD through Pay.Gov or any other bill pay service are responsible for terminating recurring payments during the extended deferment period.
- After the deferment period ends, borrowers will be required to make regular principal and interest payments beginning 30 months from the date of the Note.
If you have any questions regarding deferment for the EIDL, please contact us.