How to pay back an EIDL or PPP loan

If your business received an Economic Injury Disaster Loan (EIDL) or Paycheck Protection Program (PPP) loan, you may have determined it isn’t a good fit for your small business for any number of reasons:

• You just wanted the EIDL grant and not an EIDL loan, 
• You didn’t understand the loan terms when you applied,
• You can’t use the EIDL funds or PPP funds the way you hoped
• You don’t think most of your PPP loan will be eligible for forgiveness
• You aren’t sure your business will survive to be able to repay a loan
• You think a conventional business loan is a better fit

Whatever the reason, you may want to pay it back. How do you do that? It can definitely be confusing! 

EIDL loan repayment

The primary way to repay your COVID EIDL loan today is through SBA's MySBA Loan Portal at lending.sba.gov, or by phone through the SBA Secure Payment Portal at 833-853-5638 (TTY: 711). As of October 1, 2025, the SBA no longer accepts paper checks — all payments must be made electronically through the portal or by phone.

You must have your 10-digit loan number and a payment amount in order to pay it back. There is no prepayment penalty, but it's possible a minimal amount of interest has accrued since the loan was disbursed. In addition, you'll have to pay back the UCC filing fee of $100 if one applies to your loan. (UCC-1 filings apply to EIDL loans greater than $25,000.)

Request a payoff amount before you submit your payment by contacting either:

• The Service Office listed on your monthly 1201 Borrower Statement, OR
• The SBA Secure Payment Portal at 833-853-5638 if you haven't yet received a 1201 Borrower Statement

Note: The Disaster Customer Service Center (1-800-659-2955) now primarily handles non-COVID disaster loans and physical-damage EIDL loans, rather than COVID EIDL repayment. If your loan is from the COVID-19 EIDL program, use 833-853-5638 or the MySBA Loan Portal instead.

Keep good records of any payments you make and when you made them; take screenshots if necessary.

Note that if you did get an EIDL loan for more than $25,000, it's a good idea to check your business credit reports to make sure the SBA releases the UCC-1 filing. UCC filings can impact your ability to qualify for other small business loans.

If you just want to pay back some of the loan early but not all of it, you can make a partial payment through the same portal.

If your loan is already past due

If you've fallen behind on payments, your situation may be different. As of September 2025, the SBA began referring delinquent COVID EIDL loans to the U.S. Treasury's Bureau of the Fiscal Service for collection. If your loan has been referred, you'll receive a demand letter (typically within about 21 days of referral) with instructions for making payment either through Fiscal Service or a private collection agency — not through the SBA payment channels described above. If you're unsure whether your loan has been referred, check your MySBA Loan Portal account or contact SBA directly before attempting to pay through Pay.gov or the portal.

EIDL grant repayment 

Remember that borrowers generally don’t have to repay an EIDL grant. These grants were given in increments of $1000 (up to $10,000) and should have been deposited into your bank account with the notation EIDG (with the “g” for “grant”). Until the IRS says otherwise, these funds may be taxable but it’s still free money for your business. 

However, if you did not fill out your application truthfully, did not apply in good faith, or you discovered your business really didn’t need the money, for example, you may want to return your grant as well. The SBA specifies that you should not use the information above to submit a payment for an EIDL Grant. Instead, contact the SBA at DisasterCustomerService@sba.gov for payment instructions.

PPP loan repayment

Paycheck Protection Program loans were made by lenders, not by the Small Business Administration. You must pay your loan back to your lender, not to the SBA. Contact your lender to ask for instructions for returning your PPP loan.

What you can and can’t use EIDL funds for

The SBA states that SBA EIDL loan funds may be used for:

“Working capital to make regular payments for operating expenses, including payroll, rent/mortgage, utilities, and other ordinary business expenses, and to pay business debt incurred at any time (past, present, or future).”

While the SBA published some guidance describing how EIDL proceeds may be used (and has updated that over time), it never published a guide for business owners describing how to use EIDL loans. The guidance the SBA did release was rather broad and it did not spell out every situation.

If you really want to understand these loans, you have to look at the history of this program.

EIDL loans weren’t created just for the coronavirus economic crisis. In fact, they’ve been part of the SBA’s Disaster Loan program for many years. Disaster loans often make national headlines when a natural disaster hits an area, like when Hurricane Ian destroyed part of Florida. So before we dive into specific questions, let’s look at how these loans were designed to be used.

According to the Standard Operating Procedures for Disaster Loans (SOP 50 39) (which predates the COVID-19 crisis): 

“Economic Injury (EI) is a change in the financial condition of a small business concern, small agricultural cooperative, small aquaculture enterprise, or PNP of any size (excluding religious organizations) attributable to the effect of a specific disaster, resulting in the inability of the concern to meet its obligations as they mature, or to pay ordinary and necessary operating expenses. (Note: the SBA opened up EIDL to religious organizations impacted by coronavirus.)  

Economic injury may be reduced working capital, increased expenses, cash shortage due to frozen inventory or receivables, accelerated debt, etc. “Economic injury loan proceeds can only be used for working capital necessary to carry the concern until resumption of normal operations and for expenditures necessary to alleviate the specific economic injury (emphasis added).”