By Jason Milleisen, Founder of Distressed Loan Advisors
Hey everyone, it’s Jason. Thanks for checking in. This is your April 2025 SBA EIDL Loan Update. I’ll walk you through what’s changed since March, and then hit you with a bunch of reminders—especially useful if you’re new to my content.
Let’s get into it.
A Government in Chaos
First things first—our government is, well, kind of a mess right now. With the new administration, things are unstable. We don’t know what’s coming, when it’s coming, or how policy will shift. So keep in mind that everything I say here could change, and probably will.
Hardship Accommodation Program (HAP) Is Dead
As of March 19th, the SBA is no longer accepting applications for the Hardship Accommodation Program (HAP).
Quick refresher: HAP allowed borrowers reduced payments for up to 30 months (10%, 10%, 50%, 75%, 75%). Many of you based your cash flow projections on this. Well… it’s gone.
Yes, it stinks.
I made a full video breaking it down and what your new options are. The link’s in the notes if you want to dive deeper.
The New Option: One 6-Month Deferment at 50%
Instead of HAP, the SBA is offering one-time, six-month deferments at 50% payments—but with a lot of caveats:
- No prior HAP participation – this must be your first time requesting help.
- Less than 120 days past due.
- Not in charge-off status—but if you are, you can get out by catching up.
- Must prove it’s a short-term problem—not just a vague “we’re struggling.”
In short, unlike HAP, this is not a rubber-stamp process. You’ll need to show a clear plan to return to full payments. If your business doesn’t look viable, they’ll likely decline you.
Reminders for EIDL Borrowers
Now let’s run through some important reminders, especially for folks who are just finding my videos.
1. Selling Your Business? Structure it as an Asset Sale
If you’re closing up shop and trying to sell your business:
- Structure it as an asset sale, not a full business sale (e.g., stock sale).
- You must get SBA permission first.
- With an asset sale, the SBA will usually allow you to sell for less than what you owe.
- If you try to sell the whole business, they’ll probably require you to pay the loan off in full—ouch.
2. Know Your Personal Liability
People ask why I haven’t done a general video explaining this. The truth is, it’s highly nuanced. A video wouldn’t cover everyone and would just cause confusion.
If you want clarity, book a consult so I can look at your specific situation. Not everyone has personal liability—and yes, that’s a game-changer.
3. Collection Process: What the SBA Is (and Isn’t) Doing
The SBA is not suing run-of-the-mill defaulters (Note: they could in most cases, but are currently choosing not to).
The only people I’ve seen get sued are those who committed fraud—and many of them are being prosecuted criminally.
If your small business just closed down, here’s what you can expect:
- No lawsuits. No judgments.
- Likely to be referred to the Treasury Offset Program (TOP).
What does Treasury Offset mean?
- 15% wage garnishment
- 15% Social Security garnishment
- 100% of federal tax refunds
- Government payments (e.g., Medicare, Medicaid reimbursements) can be levied
4. Credit Reporting
If you personally guaranteed your loan, yes, they could report it to your credit.
But here’s the thing—they’re not. At least not lately. I haven’t heard anyone say it’s shown up on their report in a long time.
So, like lawsuits, it’s a theoretical risk, not a practical one at this point.
5. Dealing With SBA Customer Service
If you’ve contacted the SBA and they ghosted you—or sent a form that made no sense—you’re not alone.
Most SBA reps are undertrained. They often follow a basic flowchart and don’t fully understand what you’re asking.
So:
- Follow up—via phone, email, or the portal.
- Be the squeaky wheel.
- If you get a form that doesn’t match your situation, push back and explain. Keep clarifying.
Example: A borrower formed a new entity for tax purposes, and the SBA sent him a “change of ownership” form. Totally wrong. So he had to go back and explain.
6. Don’t Sell Assets Without Permission
If you’ve already sold business assets without SBA approval:
- Tell them immediately.
- Provide proof of sale.
- Remit the money.
Do not keep the money or use it for other debts or personal expenses. That’s considered a fraudulent conveyance and could land you in front of the inspector general.
7. Offer in Compromise (OIC)
So much confusion here.
- For a long time, they said “no” to any kind of settlement.
- Then, if you mentioned “Offer in Compromise,” they’d send the forms.
- But every single one I’ve heard of has been rejected.
It’s frustrating and misleading. If you want to try, sure—throw it against the wall. But I wouldn’t get your hopes up.
As of April 4, 2025, I’ve heard of zero OIC approvals for SBA EIDL loans. If that changes, I’ll be the first to let you know.
8. Bankruptcy
Yes, sometimes bankruptcy makes sense—but please make an informed decision.
Here’s what I recommend:
- Talk to someone like me (financial consultant).
- Talk to a bankruptcy attorney.
- Understand the real risks.
People think the SBA is coming after their house. But for 99% of loans, your house wasn’t pledged as collateral. And they’re not suing people, so there’s really no risk of them taking your home.
Bankruptcy stays on your credit. You don’t want to look back and regret it if it wasn’t necessary.
I don’t give legal advice, but I can help when it comes to assessing options for EIDL and SBA 7a loans.
Final Thoughts
That’s the April 2025 Update.
If you’ve booked a consult with me—thank you. That’s how I make my living, and I appreciate you more than you know.
If you find this info useful, I’ll keep making updates. And if you need personalized guidance, I’m here for you.
Thanks again. See you on the next one.
Schedule time with me here.
