What You Can Do as Government Seeks to Collect Unpaid EIDL Loans

Did your business receive a loan from the US Small Business Administration (SBA) through a pandemic stimulus program such as the Paycheck Protection Program (PPP) or the Economic Injury Disaster Loan (EIDL) program? If so, and particularly if you owe money on an EIDL loan, your loan could be past-due or your Hardship Accommodation may be expiring. To be sure, many of those EIDL dollars have not been repaid, and a few months ago, the government reported that it was planning to take a new and more aggressive approach to collect the dollars.

If you received an EIDL through the SBA and still owe the money, what do you need to know about the government’s intentions to collect? And, further, what options do you have if you are struggling to repay what you owe? Our West Palm Beach business law attorneys can tell you more.

Government Plans to Collect on EIDL Loans 

In late December 2023, the Biden administration announced “plans to more aggressively pursue thousands of small businesses with past-due pandemic loans . . . to collect an estimated $30 billion in delinquent debt,” according to an article in The Washington Post. As the article underscores, “Congress allowed borrowers to request their PPP loans be forgiven, while those who obtained aid under the EIDL were supposed to repay their money.” However, many businesses have past-due loans, while others are facing expiring hardship deferments.

Given that the federal government believes there are approximately $62 billion dollars outstanding in past-due EIDL loans that were for amounts of $100,000 or less, efforts have increased to collect. Many delinquent businesses have received multiple communications from the SBA in an attempt to recover money owed through EIDL loans, and a wide range of small businesses have already been placed on “an official list that prohibits them from obtaining federal loans and other related aid in the future.”

EIDL Hardship Accommodations and Extensions 

What should you do if you have a past-due EIDL loan or your business is struggling to repay what it owes on an EIDL loan? In short, you may be eligible for a Hardship Accommodation or an extension if you have already applied.

Certain eligible businesses can request a Hardship Accommodation or may be able to receive an extension that can lower the amount of monthly payments for a certain period of time. If you have been contacted by the SBA about your EIDL loan or you have a past-due SBA loan, you should seek legal advice.

Contact a West Palm Beach Business Law Attorney Today 

Do you currently owe money on an EIDL loan and need help seeking a hardship accommodation? It is important to get in touch with one of the experienced West Palm Beach business lawyers at Kelley Kaplan & Eller, PLLC as soon as possible to determine your eligibility and to enroll in the Hardship Accommodation Plan or renew in a timely manner. Timing is key, and waiting too long could impact your eligibility. Contact us today to find out about options for repaying your EIDL loan or, if necessary, your options for a business bankruptcy filing.

Sources:

washingtonpost.com/business/2023/12/28/sba-eidl-loans-debts/

sba.gov/article/2024/01/05/small-business-administration-announces-further-action-help-ppp-covid-eidl-borrowers