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SBA Extends Deferment Period for Disaster Loan Program

Some excellent news for companies who took out Covid Financial Harm Catastrophe (EIDL) loans: the Small Enterprise Administration is extending deferment intervals for disaster loans as soon as once more.

With no additional Covid-related aid funds from Congress in sight, the SBA is permitting those that sought catastrophe loans from the Covid-relief program to increase the deferment interval for 30 months from when the mortgage was first authorised. These in search of this deferment will nonetheless must pay interest–around 3 percent–on the loans, which is mostly thought of cheap.

The extension applies to all EIDL loans authorised since 2020. Some catastrophe loans beforehand had deferment intervals for both 18 months or 24 months.

SBA Administrator Isabel Guzman mentioned in a Tuesday assertion that the prolonged deferment for the loans will assist thousands and thousands of small enterprise house owners.

The announcement arrives simply days after a gaggle of 16 senators requested the SBA to increase the deferment interval. In their letter, the senators emphasised the challenges that small companies confronted amid the surge of the Omicron variant, which embody staffing crunches and drops in income. Those self same challenges proceed to linger for a lot of companies at the moment.

Senator Ben Cardin (D-MD), who chairs the small enterprise and entrepreneurship committee within the Senate, praised the SBA’s determination to increase the deferment interval. “Washington can not mistake our indicators of restoration for proof that small companies have recovered from the pandemic,” Cardin mentioned in a press release. “Tens of millions of small companies, particularly eating places, bars, and different hard-hit sectors, are being sandwiched between late payments and rising provide and labor prices.

The EIDL program has distributed greater than $351 billion value of aid to almost 4 million debtors, based on the SBA. The SBA didn’t instantly reply to Inc.‘s request for remark.

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