WASHINGTON, D.C., USA — Struggling small businesses that received COVID Economic Injury Disaster Loans can now get short-term help paying back what they owe.
Following concerns from owners, the Small Business Administration recently decided to offer hardship accommodation plans for “borrowers facing short-term financial challenges.” Those who enroll and are eligible will pay a minimum 10% of their monthly payment for six months, according to the SBA.
“The hardship accommodation plan is designed to help borrowers who are experiencing a financial setback that prevent them from making the normally scheduled payments on their COVID EIDL loan,” SBA Public Affairs Specialist Nayana Sen told WCNC Charlotte.
Sen said borrowers with loans less than or equal to $200,000 can request hardship accommodations through the agency’s Capital Access Financial System (CAFS). Meanwhile, those with larger loans can email email@example.com directly.
The SBA had deferred payments for the last two-and-a-half years, but the grace period recently ended in the midst of an uncertain economy.
Nearly four million small business owners received a combined $390 billion through the EIDL program. The low-interest loans generally carry a 30-year terms, but there are fears that borrowers may end up delinquent.
An August 2022 National Restaurant Association survey found fewer than one in four owners who received an EIDL loan would be able to pay the principal and deferred interest. The association later sent a letter to the SBA asking for more flexibility.
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