If your freelance business received an Economic Injury Disaster Loan (EIDL) during the COVID pandemic, it will soon be time to start paying it back, given that The U.S. Small Business Administration’s (SBA) extended 30-month deferment period is coming to a close.
Under the SBA’s existing deferment program loan payments were deferred for up to 30 months from the loan inception under the COVID Economic Injury Disaster Loan (EIDL) program. To help small businesses and freelancers who are still struggling financially, the SBA announced a Hardship Accommodation Plan in March of 2022 which provided the option of paying just 10% of monthly payments or $25 for up to six months.
The Hardship Accommodation Plan is available if you meet certain conditions and enroll in it 60 calendar days before your first EIDL payment due date. The instructions from the SBA are as follows:
● If your loan amount is less than or equal to $200,000: To enroll in the
Hardship Accommodation Plan, create a CAFS account or log in to your
existing account. Within CAFS, hover over "Borrower" and select "Borrower
Search." Select the appropriate loan number and request the Hardship
Accommodation on the Loan Info page.
● If your loan amount exceeds $200,000: To apply, contact the COVID-19 EIDL
Servicing Center at 833-853-5638 or email@example.com (and
include “Hardship Accommodation Plan” in the subject line). You will be
contacted by a loan specialist regarding requirements.
Some important caveats about the EIDL deferment:
● It does not apply to non-COVID disaster home and business loans.
● It is effective for all COVID-19 EIDL loans approved in calendar years 2020,
2021, and 2022.
● Interest will continue to accrue on the loans during deferment and may result in
an increase in the interest payments at the end of the loan.
● You can make partial or full payments during the deferment period but are not
● The SBA recommends using www.pay.gov to make your payments and will only send loan payment reminders via email.
● When the deferment period ends, COVID-EIDL Borrowers will be required to
make regular principal and interest payments beginning 30 months from the date
of the loan agreement, unless you apply 60 days prior to the repayment start
date as noted above.
If you have an EIDL loan for your freelance business that is coming due after the 30 month deferment and it will squeeze your cash flow or you simply cannot make the full payments, consider taking advantage of the Hardship Accommodation Plan that will give you a little bit more breathing room as you work toward a stronger financial position for your freelance business.