In the Hudson Valley, 36,371 businesses or nonprofits owe the federal government $4,046,022,794 in COVID Economic Injury Disaster Loans (EIDL) that begin to come due for repayment next month and Senate Majority Leader Chuck Schumer of New York wants a delay.
The loans were made to more than 330,000 small businesses and nonprofits in New York state as part of Small Business Administration (SBA) programs to help them survive the pandemic. Nationwide, more than 3.9 million EIDLs were approved totaling $348.8 billion.
The SBA also offered Targeted EIDL Advances that did not have to be repaid, unlike the EIDL loans.
Businesses were issued loans carrying an interest rate of 3.75% while nonprofits have a 2.75% interest rate. The fixed-rate 30-year loans could be for amounts up to $2 million.
Initially, loan repayment did not have to begin until 12 months after the loan had been issued. In March 2021, the SBA announced extended deferment periods for all disaster loans, including the EIDL program.
SBA disaster loans made in calendar year 2020 had their first-payment due date extended from 12-months to 24-months from the date of the note. All SBA disaster loans made in calendar year 2021 had their first payment due date extended from 12-months to 18-months from the date of the note.
Schumer is asking the SBA to again extend the period during which loan repayments are deferred.
“The EIDL program has been a lifeline for hundreds of thousands of New York”™s small businesses and nonprofits, across every county of the state, struggling to stay afloat during these turbulent times,” Schumer said. “However, with loans starting to come due next month, and many of our small businesses, from local restaurants to mom-and-pop stores, as well as nonprofits still feeling the impact of the recent Omicron wave and rising costs from supply chain disruptions, so many of New York”™s small businesses are still not financially prepared to shoulder the burden of this looming cost.”
Schumer wrote to SBA Administrator Isabel Guzman, “You have the authority to reduce at least some of the uncertainty businesses are facing with regard to their EIDL loans. As you did last year, we encourage you to use the SBA”™s statutory authority to provide additional breathing room for small businesses whose loan payments will soon become due. As you know, small businesses are resilient and innovative.”
U.S. Sens. Maria Cantwell and Patty Murray, both Democrats from Washington state, and seven members of Washington”™s Democratic Congressional Delegation sent their own letter to Guzman also asking for a new deferral of loan payments.
