$220M Worth of EIDL Funds Already Charged Off

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money bombIt’s a small sum compared to the total outstanding principal balance, but $220M worth of covid-related EIDL funds had already been charged off as of SBA fiscal year-end 2022. That year-end of September 30th is before almost any borrower was required to make even one payment on the 30-year loan. The total outstanding principal balance net of charge-offs was $358B at the time.

The SBA originally allowed a 30-month deferment on EIDL payments and just recently began offering an additional six-month deferment to eligible borrowers if they need it. Making payments at all can be a little bit complex in that of itself, however.

It remains to be seen how covid-era EIDL borrowers will perform. The SBA charged off $457M in just 7(a) loans in 2022 alone, for example, so the figures on the EIDL are not that material yet. In the years before covid, the SBA was regularly charging off between $800M-$2B/year in loans total. However, it is unlikely that a significant number of them defaulted before the first payment was even due.

total charge offs

Last modified: January 2, 2023
Sean Murray

Category: Business Lending

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