ATTENTION BUSINESS OWNERS WITH EIDL OR PPP LOANS IN DEFAULT:
Recent Policy Reversal by the SBA:
The SBA has recently reversed its decision from 2022, resuming collection activities on past-due EIDL loans of $100,000 or less. This change is part of an effort by the Biden Administration’s effort to recover past-due pandemic loans, totaling an estimated $30 billion in delinquent debt.
Check Your Loan Status:
If you received an EIDL of $100,000 or less, it is crucial to verify the status of your loan to ensure it is up to date. Failure to do so may lead to collections by the federal government after March 3, 2024.
If Your Loan is Current: Explore a Hardship Accommodation Plan:
These accommodations aim to assist borrowers needing additional time, or lower monthly payments to keep their loans current. More information can be found here:
MySBA Loan Portal
Manage your EIDL | U.S. Small Business Administration (sba.gov).
If Your Loan is in Default: Contact the COVID EIDL Servicing Center Directly:
(833)-853-5638, email COVIDEIDLServicing@sba.gov, or set up an account in the and send a message through the Portal. If you are not getting your loan issues resolved, you can contact the District Office at (401) 528-4561 or by email at RhodeIsland_DO@sba.gov.
Consequences of Default:
Inaction may result in your loan being referred to the IRS and Treasury Department for collection. Defaulting on an SBA loan can have severe consequences, affecting your ability to access capital in the future. Potential penalties for not taking action include:
- Wage and tax return garnishment
- Debt collectors used which incur more fees needed to pay back
- Will be on Do Not Pay list until matter is resolved.
Take Advantage of the 60-Day Goodwill Grace Period:
To provide some relief, the SBA is implementing a 60-day goodwill grace period, during which delinquent loans will not be sent to the IRS or Treasury Department for collection. This grace period extends through March 3, 2024. After this date, collections activities may commence.
Act Now and Contact the SBA for Assistance:
If you suspect your loan is not current or you are unsure of its status, we strongly encourage you to contact the SBA immediately. Reviewing your options now can significantly reduce the likelihood of negative consequences in the future.
Articles to Reference:
In reversal, U.S. to pursue unpaid covid loans made to small businesses - The Washington Post
SBA Offers Grace Period to Business Owners With Covid-Era Loans | Inc.com
SBA Offers Leniency to Entrepreneurs With PPP and EPL Loans (blackenterprise.com)