Hey everyone, Jason here, founder of Distressed Loan Advisors. If you’re looking to book a time with me, you can do so HERE.
I haven’t made a blog post in a while because, honestly, not much has changed. But now that we’re into 2025, I wanted to do a quick refresh on what’s going on in the world of EIDL loans. Let’s get into it.
The Future of EIDL Offer in Compromise (OIC) Under the Trump Administration
The number one question I’ve been getting lately is: What’s going to happen to EIDL loans when the administration changes to Trump?
My best guess? It’s going to be even less likely that an offer in compromise (OIC) will become an option. While I don’t have concrete evidence, I base this on how student loan forgiveness played out. It was initiated and supported by Democrats and opposed by Republicans. With Republicans taking control, history suggests they’ll lean toward more aggressive collections rather than blanket forgiveness.
That being said, I still hope that some form of OIC gets implemented. Maybe political winds will shift, and suddenly, it’ll become popular. But if OIC remains off the table, I at least hope they extend the hardship accommodations—especially the 10% option.
Hardship Accommodation Program: What’s Next?
The hardship accommodation program has been a lifesaver for many borrowers, particularly the 10% payment option. Most people can manage a 10% payment, but once it jumps to 50% or 75%, it becomes unaffordable.
I expect that as more borrowers exhaust their hardship accommodations and start defaulting, the SBA will have to introduce additional relief options. Whether that means extending the hardship program or bringing back a new version remains to be seen.
Selling Business Assets? Get SBA Approval First
A friendly reminder: If you’re selling your business or business assets, you must get SBA approval first.
I’ve had plenty of people call me after they’ve already sold their assets, telling me they didn’t realize they needed permission. Some even used the money to pay off personal debts. Here’s the problem: The SBA considers that fraudulent conveyance—meaning you improperly transferred assets without approval.
This could get you referred to the Inspector General, the federal agency that investigates fraud, waste, and abuse.
To be clear, if you’re a retailer, you can sell inventory as usual. What you can’t do is liquidate everything in bulk at a discount without SBA approval. Similarly, if you run a restaurant, you can’t suddenly decide to sell all your kitchen equipment and claim, “Well, now I’m in the restaurant equipment business.” It doesn’t work like that.
What’s Happening with Collections?
I’ve said it before, and I’ll say it again: If you default on an EIDL loan, the SBA is not suing people—unless they committed fraud.
If you lied about your business revenue, stole someone else’s tax ID, or spent the funds on a beach house or a boat, they’re coming after you. And not just with collections—criminal charges, too. I see news articles every day about people going to jail over fraudulent EIDL loans.
For everyone else, lawsuits don’t seem to be happening.
Treasury Offset Program (TOP)
As for collections, the SBA isn’t aggressively referring people to the Treasury Offset Program (TOP) right now. But that could change.
In early-to-mid 2024, a bunch of loans were referred to the Treasury, overwhelming their system. Borrowers couldn’t even reach the Treasury because there were so many cases. Eventually, the SBA pulled loans back, saying they could now hold them for up to two years before referring them again.
To be clear: “Up to two years” doesn’t mean they will wait two years. They can send loans to the Treasury whenever they choose. Right now, it seems like they’re holding off—but that could change at any time.
If your loan is only in a business name (LLC, S-Corp), Treasury Offset isn’t as big of a deal. But if you personally guaranteed the loan, that’s when it becomes more of a concern.
Final Thoughts
That’s the latest on EIDL loans as we start 2025. If I hear any major updates, I’ll be sure to share them.
And since I don’t do a newsletter, the best way to stay informed is by subscribing. That way, you’ll always have the most up-to-date info on what’s happening with EIDL loans.
Thanks for checking in—I’ll see you in the next one! Schedule time with me HERE.