The Small Business Administration approved 6,552 Economic Injury Disaster Loans (EIDL) in North Dakota, totaling over $745 million.
In recent weeks I have heard several remarks about these loans. The EIDL program is designed to provide small businesses with working capital needed to overcome the negative financial impacts of a declared disaster.
The operative word is loans. The EIDL program is a loan program with a 30-year maturity and an interest rate of 3.75% for most borrowers. Under the COVID disaster declaration, EIDL loan payments are deferred for two years with principal and interest payments required over the remaining 28 years. SBA began approving COVID EIDL applications in March 2020. For those early loans, we are rapidly approaching the end of the deferment period. Business owners should start preparing to make payments.
Borrowers also should review their loan authorization to ensure they are following certain provisions. For loans above $25,000, SBA filed a lien on the business assets. If a business owner wants to sell a piece of equipment or the business itself, SBA will need to approve the release of its lien. In some cases, this may require a cash payment to reduce the loan balance. These requests are approved by one of SBA’s disaster loan centers and borrowers should be prepared to make their request well in-advance of the actual sale.
EIDL borrowers in North Dakota should contact SBA’s servicing center in El Paso at 800-487-6019 and borrowers in Minnesota should contact the servicing center in Birmingham at 800-736-6048.
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Alan Haut is the SBA’s North Dakota district director based in Fargo.
This letter does not necessarily reflect the opinion of The Forum's editorial board nor Forum ownership.
