Last year when the pandemic started, Congress created two loan programs to help small businesses and the self-employed mitigate the economic impact; The Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL). With the uncertainty surrounding COVID-19, many businesses applied for and received both loans. Businesses used up the PPP funds first and hopefully applied for and received forgiveness for that loan. What should you do with the EIDL loan? Perhaps your business has stabilized somewhat in recent months and these funds are no longer necessary or you are using these funds to help your business succeed.
The EIDL is a 30-year loan at a 3.75% interest rate that is not forgivable. At the inception of this loan program, it was stated that no payments were required during the first year but interest would still accrue. In March 2021, the SBA added an additional 12-month deferment of principal and interest payments until March 31, 2022. Borrowers will resume their regular payment schedule starting April 1, 2022 unless they voluntarily choose to make payments while on deferment. It is important to note that interest will continue to accrue on the outstanding balance of the loan through the deferment period.
Many small businesses and the self-employed are choosing to make payments on that interest that is accruing or even want to pay the EIDL loan back in its entirety. According to the SBA there are two website that are important when discussing the EIDL loan and the options to begin making payments toward that loan balance:
- https://caweb.sba.gov – View your SBA loan information here.
- https://Pay.gov – Processes payments for the US Treasury. Representatives at this site do no have access to any of the SBA loan information, such as loan interest and any due dates. Use this website to set up a one time payment or recurring payments. You will need the SBA Loan Number to access this website, not the application number.
For questions related to the EIDL loan, please call SBA’s Customer Service Center at 1-800-659-2955.