SBA defers disaster loan repayment for small businesses

There is good news for businesses across the Quad Cities region and the nation that received a federal disaster loan to assist them through the COVID-19 pandemic: The repayment period has again been extended. 

The U.S. Small Business Administration (SBA) announced on Tuesday, March 15 that existing COVID Economic Injury Disaster Loan (EIDL) program borrowers can have their principal and interest payments deferred for 30 months from when the loan was first approved. 

In a news release, the SBA said the extension will provide additional flexibility to small business owners impacted by the pandemic. The agency previously had extended the deferment period for some loans either 18 or 24 months.

“Though our small business owners continue to power a historic economic recovery under the Biden-Harris administration, we must continue to do everything in our power to meet our small businesses where they are with resources to ensure they can recover and thrive,” SBA Administrator Isabella Casillas Guzman said in a news release.  

She added that the deferment “will provide financial relief to millions of small business owners – particularly those hardest hit by the pandemic and related marketplace challenges.”

The EIDL program, which was part of COVID relief federal funding, has allocated more than $351 billion in relief aid to 3.9 million borrowers. 

As of Thursday, March 17, there had been 18,504 EIDL loans approved in Iowa for a total value of $1.98 billion since the program began. In Illinois, during the same period, 149,773 EIDL loans had been approved for a total of $13.06 billion.

Joel Youngs, regional director for Eastern Iowa Small Business Development Center (SBDC), said both the EIDL and the Paycheck Protection Program (PPP) loans kept “quite a bit” of Quad Cities businesses open during the pandemic.

“My office helped people access $30 million of federal funding,” he said of the regional office, located at Eastern Iowa Community Colleges, Davenport. It serves small businesses in Scott, Clinton, Muscatine and Jackson counties.

“Even in good times, there are businesses that are stressed and on the edge,” he said. “When something like COVID happens, it can cause them to shut their doors. The EIDL and PPP saved them from having to shut their doors. Even good businesses took a big hit, so the EIDL and PPP helped them stay good rather than getting hit harder.” 

The federal pandemic relief, launched in 2020, sent twice the normal volume of small business owners to the Eastern Iowa SBDC for assistance in applying. In fact, Mr. Youngs said “In a normal year, we see 350 small business owners. Last year, we saw 737 small business owners – all the extras were after EIDL and PPP loans.” 

As of Jan. 1, 2022 the SBA stopped accepting new applications for EIDL loans or advances. However, borrowers can still request increases up to their maximum eligible loan amount for up to two years after their loan origination date, or until funds are exhausted, whichever comes first, the release said. 

The PPP has closed, Mr. Youngs added. 

Key information from the SBA about the EIDL deferment includes: 

  • The extension applies to all COVID EIDL loans approved since 2020. Interest will continue to accrue on the loans during deferment. 
  • Borrowers may make partial or full payments during the deferment period. The SBA recommends using
  • The SBA will not send monthly SBA Form 1201 payment notices; however, it will send regular payment reminders via email.
  • Existing COVID EIDL borrowers can find account balances and payment due dates by logging in to the Capital Access Financial System ( 
  • Deferments may result in balloon payments. The deferment will not stop any established Preauthorized Debit (PAD) or recurring payments on the loan. Borrowers with an established PAD must contact their SBA servicing center to stop recurring payments during the extended deferment period. Those who established a PAD through or another bill pay service are responsible for terminating recurring payments. 
  • After the deferment period ends, COVID EIDL borrowers will be required to make regular principal and interest payments. 

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