Most EIDL borrowers don't know they may not be personally responsible for this debt.
If your business is an LLC or corporation, your loan is under $200,000, and your business is closed or closing — the SBA's recourse may end with the business, not with you. But even if you are personally liable, you have options. Most people just don't know what they are.
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Most business owners don't know they may not personally owe their EIDL debt.
If three conditions are met, the SBA's only legal recourse is against the business entity — not you personally. Once the entity is properly shut down, you walk away. No personal wage garnishment. No tax refund seizure. No Social Security offset. The debt stays with the business.
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1Your business is an LLC or corporation. Not a sole proprietorship. The LLC or corporate structure is what separates the business's legal obligations from your personal ones.
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2Your EIDL loan is under $200,000. Loans under $200K did not require a personal guarantee. Above $200K, a personal guarantee was required — which changes your situation. (See Path 3 below.)
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3Your business is closed or in the process of closing. The entity must be properly dissolved — bank account closed, LLC or corporation dissolved with the state, final business tax return filed or in process.
If all three are true, the SBA cannot pursue you personally. Once the entity is properly wound down, its assets are effectively zero. The debt ends with the business.
The SBA will still ask questions — 16 to 20 follow-up inquiries about business assets. We handle all of that on your behalf with Power of Attorney. You don't respond to the SBA directly. We do — and we document the closure properly so there is no opening for personal pursuit.
- Confirm no personal liability — in writing, with the SBA
- Manage all SBA correspondence on your behalf (POA)
- Provide documentation of proper business closure
- Handle the SBA's 16–20 follow-up questions on business assets
- Ensure the closure is airtight so no personal pursuit is possible
Your loan required a personal guarantee — or you're a sole proprietor.
That's where we start.
Loans over $200,000 required a personal guarantee. Sole proprietors are personally liable regardless of loan size. If this is your situation, Treasury can pursue you directly — wages, tax refunds, Social Security benefits. Without a court order.
That is the reality of your position. It is not the end of the conversation.
EIDL borrowers who are personally liable have real options. They are not OIC — that path is not available for COVID EIDL loans. But workout, hardship resolution, installment agreements, and currently not collectible status are all available. Which one applies depends on your financial picture.
Every month in default, your options narrow. Default doesn't expire. It escalates. The time to act is before the next collection action — not after it.
If a private collection agency has contacted you, do not make payment arrangements with them before speaking with us. PCAs are legally required to present all available hardship options — not just the most aggressive repayment demand. If they're not doing that, we file grievances against them.
- Installment Agreement eligibility — can you repay on restructured terms?
- Currently Not Collectible (CNC) status — is collection suspension appropriate?
- Hardship resolution qualification — what EIDL-specific options apply?
- A recommended resolution pathway based on your actual financial picture
- Conducted by our credentialed in-house team — not a consultant
COVID EIDL loans are not eligible for Offer in Compromise. The FAR for EIDL borrowers determines installment agreement, CNC, and hardship resolution eligibility — not OIC. If you have a 7(a) loan, see the SBA loan path.
What's available for EIDL borrowers.
These are the resolution options for COVID EIDL loans. The right path depends on your business structure, loan size, and financial picture. The call tells you which one applies.
For qualifying borrowers: once the business entity is properly closed, the SBA's recourse is limited to business assets only. No personal liability. The most powerful outcome available for EIDL borrowers — and the most overlooked. $6,500 flat.
Restructure repayment terms — extended timeline, reduced monthly payment — to bring the debt to a level your business can sustain. Available through SBA hardship programs most borrowers never learn about.
Pause payments while your business stabilizes. Stops escalation before default is declared. A temporary reset — but buys the time needed to explore every option before the situation gets worse.
A formal hardship determination opens EIDL-specific options with the SBA — reduced payment structures, long-term workout arrangements, postponed collection. Requires a FAR to establish your financial picture.
A structured monthly repayment plan negotiated with Treasury at a level your finances can actually support. Stops active garnishment and offset activity while the agreement holds.
For borrowers whose financial picture demonstrates true inability to pay. Treasury suspends active collection while your status is reviewed. Not forgiveness — but real relief while options are evaluated.
COVID EIDL loans are not eligible for Offer in Compromise — confirmed by SBA Form 1150. Any firm implying otherwise is creating a credibility and legal risk for you. EIDL resolution paths are workout, modification, deferment, and hardship resolution. If you have a 7(a) loan and want to know about OIC, see the SBA loan path →
Call Us. Tell Us What's Going On.
No forms. No intake questionnaires. No waiting for a callback from someone you've never spoken to.
You call. We listen. You describe your loan, your business, where things stand. We ask a few questions. Then we tell you what your options are.
In most EIDL cases, we know within five minutes whether you're looking at Tier 1 (no personal liability), a still-operating resolution, or a personally liable path. The call is fast. The answer is real.
If you're an LLC or corporation with a loan under $200K and a closed or closing business — this call could be the conversation that ends a year of lost sleep. That's not marketing language. That's what happens when someone finds out they may not owe this debt personally.
A conversation — not a sales call.
Not ready to call? Download the SBA & EIDL Loan Default Survival Guide — free. Know your rights, understand your options, and come to the call prepared.
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Know where you stand.
Know what's possible.
Know what to do next.
COVID EIDL default. No personal liability. Still-operating resolution. Treasury collection. We've navigated all of it — for hundreds of business owners across the country. On staff. Not on a referral list.