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Millions of businesses took Economic Injury Disaster Loans (EIDL) during the pandemic. Many are now struggling with the payments. What you do early makes a big difference.
How delinquency usually unfolds
- Missed payments. SBA servicing sends notices and the loan is marked delinquent.
- Default and charge-off. After a period of non-payment, the SBA may charge off the loan and demand the full balance.
- Referral to the U.S. Treasury. Federal law generally requires agencies to refer seriously delinquent debts to Treasury for collection. Treasury can add collection fees, offset federal payments like tax refunds, and use private collection agencies.
Options to explore early
- Contact SBA servicing before you fall far behind. Ask what payment assistance or modified payment options are available for your loan right now. Programs change, so ask directly.
- Keep records of every contact and every hardship document you send.
- Offer in compromise. In some cases the SBA will accept less than the full balance, based on your ability to pay and the value of collateral.
- Understand your personal exposure. For larger EIDLs, you may have signed a personal guarantee, and the loan may be secured by business assets. Know what you signed.
Mistakes to avoid
- Ignoring SBA letters until the debt reaches Treasury, when options narrow and costs rise.
- Closing or selling the business, or moving assets, without understanding how it affects the loan.
- Paying anyone a large upfront fee who promises to make an SBA debt disappear.
Our SBA and EIDL Resolution service handles workouts, offers, and appeals.
This is general information, not legal, tax, or financial advice for your specific situation. Every case is different. Always check the dates and amounts printed on your own documents.