Chicago Small Business EIDL Loan Lawyer
The U.S. Small Business Administration’s (SBA) Economic Injury Disaster Loan (EIDL) program was federally-run and provided small businesses with loans to help them recover from the disastrous economic impacts caused by the COVID-19 pandemic. Illinois approved more than 148,366 EIDL applications and while these loans greatly helped out some business owners, there are still important things to know. Below, our Chicago small business EIDL loan lawyer explains more.
What were EIDL Loans?
Small agriculture cooperatives, small businesses, and the majority of private non-private organizations that suffered economic harm as a result of the pandemic qualified for an SBA EIDL loan. The loan was received directly from the SBA and at the time, the SBA stated that these loans must be repaid. However, the loans had low fixed interest rates and long-term loans to help overcome the impacts of the pandemic. The loans were meant to provide working capital to help businesses cover their operating expenses.
The SBA stopped accepting applications for new EIDL loans or advances on January 1, 2022. At that time, small businesses could still request a loan increase or a request for reconsideration if they had previously been denied a loan. However, the SBA stopped accepting these requests on May 6, 2022.
Collections on Some EIDL Loans have Stopped
All EIDL loans initially had to be repaid. However, many businesses still suffered from the effects of COVID-19 in 2022, and could not repay the loans. The U.S. government did pursue debt collection on these loans quite aggressively but some of those collection efforts have stopped. The government has terminated certain efforts to collect an approximate $62 billion in past-due COVID loans, stating the cost to recover the debt is much greater than simply writing off the debt.
The government largely stopped collection efforts on loans under $200,000. For those who owe more than that and that signed a personal guarantee, an offer in compromise may be a good option.
Offer in Compromise for an EIDL Loans
An offer in compromise may be possible for some businesses. In order for the SBA to process an offer in compromise, businesses must fill out SBA Form 1150. Other information must also be contained in the offer in compromise and this includes:
- Letter from the guarantor outlining the reason for financial hardship
- Supporting documents regarding the financial hardship
- Statements that clearly establish the source of funds used in the offer
- SBA Form 770, Financial Statement of Debtor
- Borrower’s Consent to Verify Information and 3rd Party Authorization signs by every guarantor and SBA borrower
- Bank statements for the last two months
- Investment account statements for the last two months
- Two of the most recent pay stubs for the guarantor and borrower
Our Small Business EIDL Loans Lawyer in Chicago Can Help with Your Offer in Compromise
If you are still struggling to pay your EIDL loan, you need sound legal advice. At Bentz Holguin Law Firm, LLC, our Chicago small business EIDL loan lawyer can help you prepare your offer in compromise and give you the best chance of a successful outcome. Call us now at 312-647-2116 or contact us online to request a free consultation and to learn more.