Pandemic SBA loans will soon have to start repaying

After 30 months of deferred payments, the Small Business Administration is now taking out economic disaster loans. Not everyone is supposed to pay.

MATTHEWS, NC — As 2022 draws to a close, small business owners like Karessa Jackson are facing the daunting reality that it’s time to start paying off their federal pandemic loans.

Jackson, the owner of a auto collision and repair shop to Matthews, expects to start making monthly payments soon related to his $500,000 COVID-19 Economic Disaster Loan (EIDL).

“It can be a struggle,” she said. “It would be great if we had another six months.”

The Small Business Administration had deferred payments for the past two and a half years, most recently in March at demand from lawmakers.

That grace period is now ending amid an uncertain economy with a possible pandemic looming.

“We haven’t really been able to recover yet,” Jackson said.

Jackson, who got his EIDL with the help of WCNC Charlotte “at a pivotal time,” used his loan to buy technology that helped his business grow.

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She is one of almost four million small business owners which received a total of $390 billion in EIDL money. The low-interest loans, which provide up to $2 million to businesses affected by the pandemic, typically have terms of 30 years, but there are fears that borrowers could end up defaulting.

Accountant Anne Zimmerman is with advocacy organization Small Business for America’s Future. She said EIDL recipients who are still having difficulty should let the SBA know as soon as possible to see if the agency can help them.

“Better to connect with them and tell them than to just ignore them,” Zimmerman said. “If you contact the SBA and say, ‘I can’t pay it,’ then it would be wise to at least find something where you at least pay the interest.”

This communication is especially critical for larger loans that the SBA required homeowners to personally guarantee.

August 1, 2022 National Restaurant Association investigation found that less than one in four homeowners who received an EIDL loan would be able to pay the principal and deferred interest. The association then sent a letter to the SBA asking for more flexibility.

Karessa Jackson said her business has just turned the corner after a tough 2022. She said her staff and revenue were down for much of the year.

“We had a real struggle this year,” Jackson said. “We went from being able to make $150,000, $160,000, $170,000 a month to $90,000, the next month it was $50,000, then it worked for a few months at $35,000, which is less than my overhead.”

She is now expected to pay nearly $3,000 a month for her EIDL, but said she was committed to honoring her end of the deal.

“It gives me a little pressure, but it just gives me more motivation and ambition to get up and go every day,” Jackson said.

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Jackson credits his parents, themselves former business owners, with sparking his motivation. She said her father instilled a mindset in her in her early years.

“Even at their lowest, they would get up and go to work every day,” Jackson recalled. “My dad used to say, ‘As long as you get up and go to work every day, you’ll come out of whatever hole you put yourself in'”

Jackson not only wants to survive but must succeed. Failure is not an option, because it is personal. Her father died of cancer when she was only 18.

“My dad couldn’t finish his work. I have to finish,” she said. “My whole life goal is to finish being able to position my family in a way that my dad couldn’t finish.”

How to Contact the Small Business Association in North Carolina and South Carolina

An SBA spokesperson said small business owners with “specific loan repayment questions” can email [email protected] Others should contact the SBA office at their domain to discuss options such as advice or technical assistance.

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“Borrowers can also contact EIDL’s COVID-19 Customer Service Center free of charge at 833-853-5638 to discuss their loan details and repayment schedule,” said Nayana Sen, public affairs specialist at SBA. “The most important thing really is that the SBA is here to help our small business owners long term and business owners should take full advantage of the free or nearly free resources that are available to them.” In North Carolina,

the SBA has an office in Charlotte located at 6302 Fairview Road, Suite 300. They can be called at (704) 344-6563. The agency’s Raleigh office at 6600 Louisburg Road, Room 351 can be reached by calling (919) 532-5525.

In South Carolina, the agency has three offices. The Columbia location is located at 1835 Assembly Street, Suite 1425, and can be called at (803) 765-5377. The North Charleston office is at 3294 Ashley Phosphate Road, and their phone number is (843) 225-7430. The third office is in Duncan at 1875 East Main Street and can be reached at (803) 253-3123.

Contact Nate Morabito at [email protected] and follow him on Facebook, Twitter and instagram.

WCNC Charlotte always asks “where’s the money?” If you need help, email WCNC Charlotte [email protected].

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