EIDL Repayment Due: Are You Primed for Default or Success?

Note: This content has been updated as of March 31, 2023 to reflect small changes for the EIDL program, specifically the Hardship Accommodation Plan.

For many small business owners who found themselves fledgling against forced COVID-19 shutdowns in 2020 and reshuffling in 2021, the Emergency Injury Disaster Loan (EIDL) Program was an economic lifeline. Through the life of the Program, the U.S. Small Business Administration (SBA) disbursed nearly $390 billion to four million small businesses and nonprofits. Of those small businesses, 90% employed ten or less individuals.

In March, 2022, SBA Administrator Isabella Guzman announced six additional months of deferment for EIDL borrowers, bringing the total deferment period to 30 months. Now, this 30-month window is rapidly drawing to a close. On October 11th, 2022, many small business owners will find themselves with a minimum, monthly payment of $731. For most borrowers, the payment couldn’t arrive at a worse time.

October 11th: Prime Day vs. EIDL Due

While U.S. shoppers look to October 11th as Amazon “Prime Day,” filling their virtual carts with deals and steals, small business borrowers will be scrambling to cover the rising costs of inflation, inventory, payroll…and now, their loan repayment. Raj Tulshan, Founder of Loan Mantra, says, “If even Amazon is not immune to our negative market, showing two quarters of losses for the first time in several years; imagine what this economy is like for a small business owner? Consider our mom-and-pop-shops who have done everything in their power to stay open, stay nimble, and stave off uncertainty for two years only to fall victim to this horrific timing.”

Amazon Alexa will be sold on October 11th during
Photographer: Jan Antonin Kolar | Source: Unsplash

EIDL Forgiveness?

Since 2020, the U.S. economic landscape has been largely uncertain and uneven. The pandemic has disproportionately and negatively impacted restaurant, retail, and hospitality sectors. But, the past six months have been particularly challenging for business owners and consumers alike, fighting rate rises and inflation.

EIDL repayment has also grown increasingly politicized, particularly in the wake of the Biden administration’s plan to administer student loan forgiveness. Many small business owners question whether they should warrant a similar debt forgiveness.

Twitter post asking for EIDL forgiveness in the same way that student loan forgiveness has been awarded by the current administration.

According to Tulshan, it’s not a question of whether EIDL can or will be forgiven. “EIDL was never intended to operate like the Paycheck Protection Program (PPP) or a government grant. It is a loan product with good rates and achievable payment plans.” Tulshan continues, “What we need to do now is foster more optimal circumstances and timing for EIDL borrowers repaying their loans and ensure against a first wave of loan defaults.”

EIDL borrower has sign in store window that reads,
Photographer: Tim Mossholder | Source: UnsplashPhotographer: Tim Mossholder | Source: UnsplashPhotographer: Tim Mossholder | Source: Unsplash

Protection From EIDL Loan Default

Loan Structure: Interest vs. Principal?

A borrower may find that their first challenge to EIDL repayment is the lack of transparency regarding the loan structure. Many question: what part of their monthly payment is being attributed to their interest versus their principal loan amount?

As a hypothetical, let’s consider an EIDL borrower who received a $150k loan in April, 2020. This borrower will need to make a minimum, monthly loan payment of $731 in October, 2022. However, as their interest has been accruing for 30 months, the borrower now owes more than $9k of interest in addition to the initial loan amount. What is concerning is that the SBA has not clarified whether accruing interest will be applied on top of the principal amount (e.g., $159k). Conceivably, then, a borrower who pays their loan at the minimum of $731/month will require more than 4 years of repayment to touch their accrued interest. Moreover, when they begin to pay down their principal, the interim interest will have continued to accrue.

The lack of transparency regarding EIDL payoff must be clarified for borrowers to feel empowered in paying off their loan debts. In order to fight against a wave of loan defaults, EIDL borrowers should see an achievable path to their debt repayment.

Individual counting several one-hundred dollar bills.
Photographer: Alexander Mils | Source: Unsplash

EIDL Payment Systems: CAFS and pay.gov

The next challenge for EIDL borrowers are the two loan servicing systems necessary to repay a loan: Capital Access Financial System (CAFS) and pay.gov. (For more information on how to operate these systems, please see here). Ideally, the Small Business Administration will demystify the loan repayment platforms and ensure repayment is more efficient for the borrowers. But a less tech-savvy borrowers is currently plagued by dual systems that require manual oversight. Currently, the clunky user experience causes a borrower pause and generates lack of confidence in the program.

One business owner shared her experience with CAFS to pay her EIDL loan. She said, “I spent fifty-eight minutes trying to wait for the platform to load, and then I questioned whether my payment was even being correctly attributed to my loan…the process was complicated and unnerving.”

Photographer: Carl Heyerdahl | Source: Unsplash

Timing: Slow Winter Sales

Perhaps the most significant concern for business owners with monthly EIDL payments due before the end of the calendar year, 2022, is the looming winter sales cycle. While holiday sales may drive an uptick in revenue for many sectors, small business owners generally plan for these boons to offset Q1 shortages.

In March, when the deferment period was expanded, analysts likely found it difficult to determine the economic realities borrowers would be facing now, in October. The market had not yet seen the rapid rise of interest rates or recession trends. Business owners have been fighting inflation for several months now and the vast majority of EIDL borrowers (with ten employees or less) do not have the extra $700/month to pay down their loan in this current economy. One business owner said, “Every dollar I have is being spent to purchase inventory or pay for headcount.”

Furthermore, small business owners in Florida and South Carolina who were tragically effected by Hurricane Ian are conflicted about whether they should take out more EIDL assistance when they already have loans due.

Twitter post that reads,

Hardship Accommodation Plan

The SBA is offering a Hardship Accommodation Plan for borrowers experiencing short-term financial challenges brought on by market unrest, inflation and other disruptions. Borrowers eligible for this plan may make reduced payments for six months. Please note that interest will continue to accrue during this time period, which may increase (or create) a balloon payment due at the end of the loan term.


  • Borrowers are required to pay at least 10% of their monthly payment amount (with a $25 minimum), for six months.
  • During the Hardship Accommodation period, borrowers can voluntarily make larger payments.
  • The regular monthly payment amount will resume and be required after the six-month Hardship Accommodation period ends. Borrowers may be able to renew the Hardship Accommodation Plan, if necessary.

Eligibility & Enrollment

Borrowers are eligible to enroll in the Hardship Accommodation Plan beginning 60 calendar days before their first payment due date.

To enroll:

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 disastercustomerservice@sba.gov (please include “Hardship Accommodation Plan” in the subject line). A loan specialist will be in contact regarding the servicing of your loan.
Photographer: Tim Gouw | Source: Unsplash

What (Else) Can You Do?

Loan Mantra understands the concerns of small business borrowers and our goal is to ensure democratized lending for all.


Do you have concerns about your EIDL repayment schedule? As your advocate, use our template email or phone script below and reach out to your U.S. Senators.

Use our scripts to request the following:

  • The suspension of your EIDL repayments for six months, or until April 2023, allowing you and other small business owners another holiday cycle of earnings and temporary relief from loan payoff during early winter months when business is generally slow.
  • To fix and streamline current loan payment and servicing systems (pay.gov and CAFS).
  • To have greater transparency in your EIDL repayment structure, including education on how your monthly payment will be attributed to both your interest and principal loan payment.

If you speak to a representative, remember to:

  • Let them know if you are a minority business owner.
  • Share how many people you currently employ in your business.
  • Be courteous and respectful as you offer your concerns.


Use our template email/letter or phone script to reach out to your U.S. senators.

Email or Letter


Resistbot (free chatbot to reach your representatives through text)

  • Use the free bot here to send the phone script via chat (text RESIST to 50409 to contact your elected officials. You will be walked through the steps on your phone).

Write, call or text your senators now and request that your voice is heard!

Picture of the U.S. Capitol, where EIDL borrowers can reach out to members of the U.S. Senate for EIDL repayment deferment.
Photographer: Joshua Sukoff | Source: Unsplash

More About EIDL

In April, 2020, the first Emergency Injury Disaster Loans (EIDL) were disbursed to small business owners struggling with the forced COVID-19 shutdowns. The Coronavirus Aid, Relief, and Economic Security (CARES) Act expanded the Small Business Administration’s long-standing EIDL Program, expanding initial funding from $150k in 2020 to $2MM in March, 2021.

The terms were this: any small business with fewer than 500 employees; sole proprietors, independent contractors, and most private nonprofits could apply for the loan. To qualify, EIDL borrowers had to prove they suffered “substantial economic injury” caused by the pandemic and to show they had been operational on January 31, 2020.

Businesses were given a rate of 3.75% and non-profits were given a rate of 2.75% with up to a 30-year term. In March, 2022-after a deferment extension was granted for EIDL loans given between 2020-2022-payments were set to begin 30 months from the date listed on the borrower’s Note.

Through the life of the program, the U.S. Small Business Administration (SBA) disbursed nearly $390 billion to four million small businesses and nonprofits. Of those small business borrowers, 90% employed ten or less individuals. At the time, Senior Advisor of the SBA, Michael Roth, hailed the Program as something that would “lift up the cornerstones of our communities; the mom-and-pop businesses and nonprofits that provide essential services for our everyday lives.”

As the cornerstones of the community, contact your senators now!