Author: Jason Milleisen, Founder of Distressed Loan Advisors
SBA Ends Hardship Accommodation Program – But Here’s What You Can Still Do
Good morning! Jason here, founder of Distressed Loan Advisors. If you’d like to book a 30-minute consultation with me, there’s a link at the bottom of this post or you can head directly to my website.
This post is a follow-up to the announcement that the SBA’s Hardship Accommodation Program (HAP) for COVID-19 EIDL loans has officially ended as of March 19, 2025.
“We received your inquiry regarding the Hardship Accommodation Plan. Effective March 19, 2025, the Hardship Accommodation Program (HAP) for COVID-19 EIDL is no longer open.”
That part isn’t news.
But here’s what is new—and important.
The SBA’s Replacement: “Short-Term Payment Assistance”
The SBA is no longer offering HAP, but they are now offering something slightly different:
Short-term payment assistance to borrowers experiencing temporary financial difficulties or cashflow challenges.
In plain English: They’re no longer just delaying payments. You now need to prove your issue is temporary and that your business is viable long-term.
Are You Eligible?
Here’s the updated list of eligibility criteria for this new deferment option:
✅ You must NOT have previously enrolled in the Hardship Accommodation Plan
If you’ve ever been in HAP—at the 10%, 50%, or 75% payment level—you are not eligible.
✅ You must be less than 120 days past due on your loan
✅ You must NOT be in charge-off status
But if you are, there’s a potential workaround (see below).
✅ You need to submit a detailed explanation of your financial situation
This explanation must clearly show:
- That your cash flow issue is temporary
- What specific event is causing the shortfall
- When and how the issue will be resolved
❌ Not Accepted:
“My business never recovered after COVID.”
✅ Accepted Example:
“Our business experienced a 60-day delay in payments from our largest client due to a system transition. Their payments have resumed, and full resolution is expected this month.”
What You Could Get (If Approved)
If your request is approved, you may receive:
- A one-time, six-month payment reduction at 50% of your usual monthly amount.
This is not the three-tier system from before—this is one chance only.
What If You’re in Charge-Off Status?
Here’s the good news. If your loan is in charge-off but has not yet been sent to the Treasury, you can potentially reinstate it.
✅ Steps to Reinstate:
- Log in to the SBA EIDL portal
- Submit a payment for your past-due balance
- Email: COVIDEIDLServicing@sba.gov
Request that your loan be reinstated to “current” status
Once your loan is current, you may then apply for the deferment.
Sample Email Template
Subject: Request to Reinstate EIDL Loan
Dear SBA Servicing Team,
I have submitted a payment for the overdue balance on my EIDL loan. I am writing to request reinstatement of the loan to current status so I may be considered for short-term payment assistance due to temporary financial hardship.
Thank you,
[Your Name]
[Loan Number]
SBA Contact Information
- 📧 Email: COVIDEIDLServicing@sba.gov
- ☎️ Phone: 833-853-5638
- 🌐 Portal: SBA EIDL Servicing Portal
Final Thoughts
If you’ve never used the Hardship Plan and you’re facing a temporary setback, this new deferment option might be worth exploring—even if your loan is in charge-off status.
Just keep in mind:
- Approval isn’t guaranteed
- You need to make a compelling case
- It’s a one-time opportunity
