Many Small Businesses Struggle with COVID-19 EIDL Loan Repayment

 

Many Small Businesses Struggle with COVID-19 EIDL Loan Repayment

Recent reports highlight a growing concern for small businesses that received Economic Injury Disaster Loans (EIDL) during the COVID-19 pandemic. According to a Fast Company article, a significant number of these businesses are facing difficulties in repaying their loans.   The article can be found at https://www.fastcompany.com/91183555/eidl-loans-covid-19-small-businesses

The Scale of the Issue

The Small Business Administration (SBA) distributed approximately 4 million loans through the EIDL program, totaling $380 billion. As of late 2023, more than $300 billion remained outstanding. Unlike some other pandemic-era financial assistance, EIDL loans are not forgivable and must be repaid in full.

Impact on Business Operations

Businesses with outstanding EIDL loans are experiencing several challenges:

Reduced access to additional credit

Limitations on new investments due to existing debt

Potential closure or bankruptcy for those unable to meet repayment terms

Our Experience

As legal professionals specializing in business debt issues, we've worked with hundreds of companies struggling with SBA EIDL loans. These loans range from $20,000 to $2,000,000. Our observations align with the broader trend:

The majority of our clients have been unable to make payments on their SBA EIDL loans

Many have found it impossible to refinance these loans

A significant number have either:

Closed their businesses

Filed for bankruptcy

Attempted to negotiate workouts with the SBA

Additional Complications

Businesses defaulting on SBA EIDL loans face further challenges:

Personal guarantee issues

Cancellation of debt tax implications

We have extensive experience counseling clients on these complex matters.

Seeking Assistance

If your business has defaulted on an SBA EIDL loan or you're dealing with personal guarantee issues related to these loans, it's crucial to seek professional advice.

Contact Jim Shenwick for assistance:

Jim Shenwick, Esq.

Phone: 917-363-3391

Email: jshenwick@gmail.com

To schedule a 15-minute telephone consultation, please use our online scheduling tool.

We specialize in helping individuals and businesses manage overwhelming debt.