Current Hardship Programs
The SBA offers several hardship accommodations for EIDL borrowers: temporary payment reduction (paying less than the full monthly amount), temporary deferment (pausing payments, though interest continues accruing), extended repayment terms, and interest-only payments. These programs are not widely advertised -- you must contact the SBA to request them.
How to Apply
Call the SBA's dedicated EIDL line at 1-800-659-2955 or contact your loan servicer. Explain your financial situation and ask about hardship accommodations. You may need to provide: recent tax returns, profit and loss statements, documentation of the hardship (medical bills, loss of major client, etc.), and a proposed payment amount you can afford.
What to Expect
The SBA's customer service can be slow and inconsistent. Be persistent -- call multiple times if needed. Get any agreement in writing. Keep records of all calls (date, time, representative name, reference number). If the initial representative cannot help, ask for a supervisor or the hardship accommodation team. Some borrowers report better results through their local SBA district office.
When Hardship Is Not Enough
If even reduced payments are unaffordable, consider: SBA Offer in Compromise (settle for less than full balance), bankruptcy (EIDL loans are generally dischargeable), or strategic default with a plan for managing the consequences. Consult with both a bankruptcy attorney and a CPA before making decisions -- the tax implications of settlement vs. bankruptcy vs. default can vary significantly.
Frequently Asked Questions
Does deferment stop interest from accruing?
No. Interest continues to accrue during deferment at 3.75%. The deferred payments and accrued interest are added to the end of the loan term. This increases the total cost of the loan.
How long can I defer payments?
Deferment periods vary. The initial COVID deferment was 30 months. Hardship deferments are typically 6-12 months. Multiple deferment requests may be possible depending on circumstances.
Will requesting hardship hurt my credit?
The SBA may report the account differently during a hardship accommodation. However, a hardship accommodation is far better for your credit than a default. Ask the SBA how they will report the account during the accommodation period.
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