What Can I Do If I Was Billed for an EIDL Loan But Cannot Pay?

Did your business recently receive a bill from the US Small Business Administration (SBA) for a loan made through the Economic Injury and Disaster Loan (EIDL) program, or for another type of pandemic-related SBA loan? If you cannot pay, it is important to understand your obligations with regard to the loan as well as your options. Whether you received the bill very recently, or you are now receiving past-due notices, you may have options that a business attorney in West Palm Beach can help with.

Make Sure You Actually Owe the Money 

If your business recently received a bill for an EIDL loan or another type of loan from the SBA, it is important to be sure that the bill is for money your business actually owes. According to the Federal Trade Commission (FTC), a number of businesses have been receiving fraudulent bills for various SBA loans that they did not actually apply for and did not receive. These bills can be especially confusing if your business did receive a type of SBA loan as part of pandemic relief efforts. Accordingly, before you take steps to manage payments, be sure that you are seeking relief or a hardship accommodation for a loan you owe.

Talk with a Lawyer About a Hardship Accommodation

 Assuming you do owe the money on the EIDL loan bill you received, if you cannot pay, your first step should be to talk with an experienced business law attorney in West Palm Beach about your options for a hardship accommodation. Whether or not you filed for a hardship accommodation in the past, you could be eligible for one now. Depending on the history of your loan and any hardship accommodations, you could have your payment reduced for a lengthy period of time.

Hardship accommodations are made in six-month periods. For the first six-month period, if approved for the accommodation, you can make payments equivalent to only 10 percent of what you owe, and you will not need to catch up on missed payments first. You may also be able to renew for another six-month period of paying only 10 percent of what you would otherwise owe. It may also be possible to renew for a third six-month period (paying 50 percent), and a fourth six-month period (paying 75 percent). A lawyer can assess your business’s circumstances and discuss the possibility of an initial hardship accommodation or renewal with you.

Consider a Business Bankruptcy Filing

 In business situations where a hardship accommodation or renewal is not an option, a form of business bankruptcy may be an important consideration. You should seek advice from your business lawyer when you are learning more about your options for an SBA hardship accommodation.

Contact Our West Palm Beach Business Law Attorneys Today 

If your business cannot make its payments on an EIDL loan that is due, it is essential to seek advice from one of the experienced West Palm Beach business lawyers at Kelley Kaplan & Eller, PLLC about a hardship accommodation. We can assist you in filing for an initial hardship accommodation or seeking a renewal. And if a hardship accommodation is not an option, we are here to answer any questions you have about Chapter 7 and Chapter 11 business bankruptcies in South Florida.

Sources:

sba.gov/funding-programs/loans/covid-19-relief-options/covid-19-economic-injury-disaster-loan/manage-your-eidl#id-options-for-borrowers-facing-financial-hardship

ftc.gov/business-guidance/blog/2021/03/what-do-if-youre-billed-sba-eidl-loan-you-dont-owe