Hey guys this is not going to be a super long post but I wanted to put something up here so everyone knows what’s going on. Today is June 15th 2023 and about a week ago we got a response back from one of the first EIDL offer in compromises that we submitted.
We weren’t sure what to expect, but we certainly weren’t expecting the response that we got. The response? The SBA is not currently considering offer in compromise for EIDL loans. Record scratch.
What? Why on God’s green earth would they not only have a form that is an application for EIDL offering compromise, but the SBA sent it to me directly when I asked about whether or not a settlement would be an option?
I asked my client to push back a little bit on the SBA rep who had emailed her and specifically asked why there exists an application for EIDL offer and compromise if they’re not actually considering them. We got back a non-committal answer, which to me means that they have no idea because the bossss haven’t told them which kind of makes sense.
When I worked as a lender, we would be off in told to do things that we either didn’t understand why, or flat out disagreed with. Hard to tell with the situation is here, but it was made very clear that any offer submitted would be rejected at this time.
So while it’s disappointing, I’m not giving up hope. In the meanwhile, people still need to understand what their options are even if settling isn’t one of them.
People are worried about what the SBA can and will do to them if they don’t repay their loan, and so for this reason I’m still staying very very busy with case evaluations.
Plenty of people talk about bankruptcy, which may be an option depending on your circumstances, but it doesn’t make sense for all people in all cases.
It’s important to remember that just because the SBA can do something as far as collection action, it doesn’t necessarily mean that they will. I know that sounds kind of cryptic, but what I’m saying is loan documents tend to provide for lots of different things, but it doesn’t mean that the SBA will actually fall through on them.
While we’re all disappointed that offer in compromise is not currently on the table, my gut feeling tells me that even if they do open up the process, the SBA is going to be asking for settlements that many people can’t afford.
Obviously because the SBA isn’t currently considering settlements, I don’t have anything concrete to point to for this feeling. All I can say is that historically, disaster loans, and that’s what an EIDL loan is, have been historically more difficult to settle than regular SBA loans.
Does it make sense that people who borrowed money following a disaster don’t have the same options as people who took regular SBA 7A loans? Not to me it doesn’t.
However I can tell you that disaster loans have attempted to settle in the past how to lower success rate than regular SBA7A loans.
Take from that what you will, but it’s just my gut feeling. I actually hope that I’m very wrong about that and that the SBA is going to be willing to be reasonable.
If the SBA is willing to consider reasonable settlement terms that’s going to be good for both you and me, so let’s keep our fingers crossed. As always I’ll continue to give updates as soon as I get them. Be sure to check back on this blog, but also on my YouTube channel where I post regular updates.