COVID-19 EIDL Borrowers- The Hardship Accommodation Plan (HAP) has been Expanded

The 30-month deferment period for COVID-19 Economic Injury Disaster Loan (EIDL) borrowers has flown by, and now it's time to start making payments. If you're struggling to make your loan payments, there's good news. In February, the Small Business Administration (SBA) expanded the Hardship Accommodation Plan (HAP) to help borrowers facing financial difficulties. Even if you were previously denied for HAP, you may still be eligible under the expanded program.

To qualify for HAP, your loan must be in repayment, including past due loans, or in default (more than 120 days late on a payment) but not yet sent to the US Treasury for extra collection steps.

If this is you, consider applying for HAP, which allows eligible borrowers to pay just 10% of their usual payments for six months. After that, you may be able to get another six months of reduced payments.

Borrowers seeking additional relief can temporarily make payments equal to 50% and then 75% of the amount due for another year.

That means you could potentially get a full year of 10% payments, followed by a year of 50-75% payments.

After the two-year HAP period, your regular payments will resume. Additionally, if you enroll in HAP but miss payments, your loan will be considered in default again, which can have serious consequences. To avoid missing a payment, the SBA recommends enrolling in autopay.

While HAP can provide much-needed relief, it's crucial to understand that it reduces your payment but doesn't cut the amount owed or the time you have to pay (30 years). This means that when the HAP ends, you may face larger payments and/or a balloon payment at the end of your loan.

To learn more about HAP and your options, check your SBA EIDL account or visit this site.