Hey everyone, Jason here, founder of Distressed Loan Advisors. Welcome to your March 2025 EIDL Loan Update. If you missed last month’s videos, no worries—I’ll give you the highlights right here.
As always, if you want a one-on-one consultation, you can schedule that here.
EIDL Legislation: Much Ado About Nothing
In February, a bill related to EIDL loans started making the rounds, causing some borrowers to panic. Speculation ran wild—were they going to forgive the loans? Crack down on collections? The truth? Neither.
The bill simply reaffirmed existing rules:
✔️ The government will continue to go after fraudsters.
✔️ The SBA is required to pursue delinquent loans (which isn’t news).
So, if you heard rumors about sweeping changes, relax—this bill hasn’t even passed, and it doesn’t change much.
New SBA Leadership: Nothing to See Here
The new head of the SBA, Kelly Loeffler, made a statement outlining her priorities, but it read more like a campaign rally than a policy shift. She emphasized that immigrants couldn’t get EIDL loans—something that was already true.
What did she say about handling defaulted EIDL loans? Absolutely nothing.
Bottom line: No major changes have been announced.
EIDL Settlements: Still a Dead End
Many borrowers keep asking about Offers in Compromise (OIC). Yes, the SBA is still sending out OIC paperwork if people request it, but here’s the reality:
✔️ No known cases of an EIDL OIC being approved.
✔️ Even an SBA insider admitted that they don’t know why they’re sending these forms.
✔️ I would love for EIDL loans to be settleable—but right now, they’re not.
If this ever changes, you’ll hear it from me first. Until then, I refuse to take people’s money for something that has no real chance of success.
Selling Your Business? Structure It Right
If you plan to sell your business, listen carefully:
✔️ Do NOT sell your LLC or S Corp outright.
✔️ Instead, sell the assets of the business.
✔️ If you sell the entire entity, the SBA will demand full repayment of the loan.
If you sell the assets instead of the company itself, the SBA will typically allow you to sell them and use the proceeds to pay down the loan.
Personal Guarantees: The Facts
Let’s go over the most common EIDL liability misconceptions:
✅ Loans under $200,000 did not require a personal guarantee—as long as you borrowed through an LLC, S Corp, or C Corp there is no personal liability.
✅ Sole proprietors? You’re personally liable, no matter the loan amount.
✅ A personal guarantee does NOT mean automatic lawsuits. The SBA is not currently suing “regular” defaulters—only fraud cases.
What’s the likely scenario for defaulting? The Treasury Offset Program (TOP), which includes:
✔️ Wage garnishment (15%)
✔️ Social Security garnishment (15%)
✔️ Seizure of tax refunds
That’s it. No surprise home seizures, no government goons draining your bank account overnight.
Treasury Offset: How It Actually Works
One confusing issue: Some people still see their loans serviced by the SBA while being placed in Treasury Offset.
This means:
✔️ Your loan could still be serviced by the SBA.
✔️ BUT—you can still have tax refunds levies, or wages/social security garnished.
If you get a letter saying your refund was taken, it doesn’t necessarily mean your loan has moved to the Treasury yet. It just means you’re in the Treasury Offer Program.
Debunking EIDL Myths (Looking at You, Reddit)
I see a ton of bad advice online, so let’s set the record straight:
❌ “They can just take money from your bank account.”
🔹 Nope. They’d have to sue you first, win a judgment, and then enforce it.
❌ “They can take your 401(k).”
🔹 Also nope. 401(k) funds are protected.
❌ “The government can do whatever they want.”
🔹 Wrong. The SBA is bound by loan documents and legal contracts. They can’t retroactively change the rules.
Fear and misinformation won’t help—facts will.
Should You File for Bankruptcy? Maybe, Maybe Not.
Bankruptcy is a tool, not a magic eraser. And in some cases, it’s completely unnecessary:
🚨 If you borrowed through an LLC and there’s no personal guarantee, personal bankruptcy may not make sense.
🚨 You can’t discharge a debt you’re not personally liable for in a personal bankruptcy.
People keep asking, “I took an EIDL loan through my LLC and have no PG. Should I file for bankruptcy?” My response? WHY?!
Make informed decisions—don’t panic and jump into bankruptcy without understanding the full picture.
Final Thoughts: Stay Informed, Stay Smart
That’s your March 2025 EIDL Loan Update. No major changes, just a lot of noise and bad information floating around.
If you need real answers about your situation without unneeded panic, you can book a consult with me at here. Otherwise, see you in the next update!
