I contacted the SBA to ask for an loan amortization schedule, they said they didn't have one. They also said that interest is accrued daily using the simple interest method, i.e., we'll be paying interest on the full original loan amount $500K for the life of the loan, which after the deferral period is about 331 months.

If we keep paying the SBA defined monthly amount of $2,518, our last payment on Maturity date will be a balloon payment $217,503 to payoff this loan. This was surprising to us and I think it will catch a lot of people off guard, especially because the SBA is not being very transparent with it, i.e. refusing to provide an amortization schedule.

Also, our original interest rate is 3.75%. However, by switching to simple interest accrued daily, the equivalent interest rate is now 5.93% (calculated based on the total amount of interest that we will pay which is $548.8K over the life of the loan).

The alternative we found was to prepay $2K every month ($4,518/month). This will completely eliminate the balloon payment at maturity, bring the equivalent interest rate down to 3.71% and payoff the loan in Feb 2028, i.e. 12 years earlier. The total savings in interest payment is significant, $230K.

I was also surprised to not find much about this searching online, I thought such a change plus the lack of transparency would get people making more noise.

I found one link that touches on the balloon payment at maturity and the importance of prepayments. But it doesn't mention anything about the change to simple interest, here it is:

https://jamietrull.com/2022/06/13/eidl-loan-updates-for-2022/

Edit: So we're paying $2K extra (prepayments), these are optional and we can stop any time we want. But if you pay $1,000 extra every month, you'll also eliminate the balloon payment at the end, the loan will be paid off by Sep 2045 (5 yrs earlier) and you'll save $88K in interest payments, but the equivalent interest rate will be 5.10%, still a little high. Thanks to u/pod_of_dolphins and u/truqb for the question.

Apologies for the long post. I hope this will be useful to others out there.