Have an EIDL loan and thinking of deferring payments? Use caution!

If you were one of the thousands of businesses who took out an EIDL loan from the SBA during the Covid pandemic, you may have received an email recently letting you know that you could defer your payments for an even longer period of time. They also included this:

You are responsible for your COVID EIDL monthly payment obligation beginning 30 months from the disbursement date shown on the top of the front page of your Note. During this deferment:
  • You may make voluntary payments without prepayment penalties at www.pay.gov – select “Make a SBA 1201 Borrower Payment”

  • Interest will continue to accrue on your loan during the deferment

  • If you do not make voluntary payments during the deferment, a final balloon payment will be due on your loan at maturity

This may sound great if things are tight for you right now, but please, please, please use caution and read the fine print. There is a stipulation noting that at the end of the loan term a balloon payment will be due. Your best bet is to start making payments now. You will also want to login to the SBA portal and download your loan documents for your records as they are going to be closing this portal this year.


To make a payment, you will visit the website pay.gov and click on the icon in the middle that says make a SBA 1201 borrower payment.


You will need to know your SBA loan number, which is different than your application number, and you will need to enter your information exactly as it is seen on your loan documents. So, if you receive your mail normally at a PO Box, you still need to enter your physical address if that is what is on your loan document. Don’t forget, if you are a sole proprietor you will need to enter your name and DBA.


You won’t be seeing a bill from the SBA, or getting reminders each month, so it’s a good idea to set a repeating calendar reminder for yourself to stay ahead of the game. You don’t want to wake up years from now owing Uncle Sam thousands and thousands of dollars!


After you have submitted your payment, you can continue on to create an account at pa.gov. This will let you track your payments, and even set up auto payments using ACH payments.

If you have any questions here are a few links to learn more.

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