Working With an Experienced Debt Relief Attorney Resolves Your Financial Burden
If you’re feeling overwhelmed by your Small Business Administration (SBA) Economic Injury Disaster Loan (EIDL), you’re not alone. Thousands of small business owners across the country are feeling the financial squeeze as they attempt to keep up with EIDL repayments.
You may have also noticed that your business never fully returned to pre-COVID revenue levels, meaning your financial obligations far outweigh your cash flow. With the SBA hardship program no longer available and no formal forgiveness plan in place, you may be asking, “What now?”
After defining what EIDL loans are, we’ll discuss which debt relief strategies you should avoid, and which ones are worth considering. Speaking with a debt relief attorney near you may be your first step toward reclaiming financial stability.
What Is an SBA EIDL Loan?
SBA EIDLs were designed to help small businesses recover from economic damage, especially during times of crisis like the COVID-19 pandemic. These loans were issued by the U.S. Small Business Administration and offered low interest rates and generous repayment terms lasting up to 30 years.
Businesses could use EIDL funds for operating expenses like rent, utilities, payroll, and other necessary costs. EIDL loans were intended to be a financial lifeline, especially for small businesses, sole proprietors, and nonprofits that couldn’t access traditional funding.
Unlike Paycheck Protection Program (PPP) loans, borrowers were expected to repay EIDLs in full, regardless of whether their business remained open or shut down.
Why Isn’t There SBA EIDL Loan Forgiveness?
As of March 19, 2025, the SBA officially ended its Hardship Accommodation Plan for EIDL borrowers. This means there is no longer any structured way to reduce your monthly payments or delay your loan directly through the SBA. There has also never been a general loan forgiveness program for EIDLs.
Although some borrowers hoped the federal government would eventually wipe out this debt, the reality is that broad debt cancellation can hurt the economy through:
- Increased inflation.
- Elevated federal debt.
- Stricter lending requirements in the future.
Debt Relief Strategies to Avoid
Not all solutions are created equal. In fact, some can put you deeper in debt or land you in legal hot water. Here are some common debt relief mistakes to avoid.
Paying a Private Company to Negotiate a “Special Deal”
If it sounds too good to be true, it probably is. The SBA is a government agency, so you should be wary of any third-party debt relief company that promises to negotiate a “special settlement” or “deal” with them.
These services often charge high upfront fees and rarely deliver meaningful results. You’re better off speaking directly with a qualified debt relief lawyer who understands federal loan obligations.
Consolidating Federal and Private Loans Together
Although having a single monthly payment sounds nice in theory, you should never prioritize convenience over everything else. Combining a government loan with credit cards, personal loans, or private business loans means you forfeit any protections and rights associated with your SBA loan. Further, this strategy usually extends your repayment timeline with more interest, not less.
Using Equity or Credit Cards to Pay Off Loans
Draining your home equity or maxing out credit cards to make EIDL payments is not a long-term solution. It shifts unsecured business debt into personal debt backed by your assets, increasing your risk. After you’ve exhausted those resources, you could be left with no options at all.
If any debt relief company pushes these methods, take it as a red flag. You’re better off speaking with a qualified debt relief attorney instead.
Debt Relief Strategies to Consider
If you’re unable to pay your EIDL loan and your business can’t afford it, there are legal strategies that may offer lasting relief.
Offers in Compromise
If you’re personally liable but cannot afford full repayment, an offer in compromise is one potential solution. This method allows you to request to settle the loan for less than you owe, based on your:
- Ability to pay
- Asset equity
- Expenses
- Income
However, success with offers in compromise to the SBA isn’t exactly high. Current data suggests the success rate for offers in compromise is around 35%.
Business Dissolution (for Non-Guaranteed EIDLs)
If your EIDL loan is $200,000 or less and not personally guaranteed, your liability may end after your business is legally closed. The SBA may still try to collect, but in most cases, its efforts are limited to business assets. This is especially advantageous for those who have little to no assets for the SBA to pursue.
You can learn more by contacting a debt relief company or law firm with expertise in business dissolution. They can help you understand what collection attempts can be ignored and which must be addressed.
Bankruptcy
This is often the most reliable path for those truly unable to repay their EIDL. EIDLs over $200,000 or those taken out by sole proprietors are personally guaranteed, meaning the SBA can directly pursue the business owner. In these situations, personal bankruptcy may be the best legal solution.
A licensed debt relief attorney can evaluate your situation and let you know:
- Whether you’re personally liable for the EIDL.
- If your income or assets make bankruptcy a viable option.
- What debts can be wiped out in bankruptcy.
- How to protect yourself and your family during the process.
How Our Debt Relief Company Can Help
The Wink Law Firm is one of the few legal agencies that specializes in EIDL debt relief. This means our Colorado-based firm gets plenty of out-of-state inquiries seeking representation. For clarity, we represent:
- Colorado residents who require a bankruptcy attorney. Non-Colorado residents are encouraged to find a local bankruptcy attorney in their state.
- Colorado and non-Colorado residents who have specific loan types or business debt, including Merchant Cash Advances (MCAs), business credit cards, and other personally guaranteed business loans.
Our legal firm represents business owners who require expert guidance as they seek EIDL debt relief. Here’s how The Wink Law Firm can help you.
- We can advise you on dissolving your business, disposing of assets, and communicating all this to the SBA.
- We can help business owners interpret ongoing collection attempts, helping you differentiate between what requires your attention and what doesn’t.
- The SBA is currently very inefficient and unpredictable at processing offers in compromise. Our team can help you navigate this complex process and mitigate any unexpected legal surprises.
- If you’re currently unable to pay your business loan, we can advise you on your options to maximize your cashflow and minimize the strain debt repayment places on you and your organization.
- If your business is reported to the Credit Alert Verification Reporting System (CAIVRS), we can provide guidance and help keep future loan opportunities open, including SBA, VA, and FHA loans.
Don’t Wait! Contact a Debt Relief Lawyer Today
If your SBA EIDL loan is causing stress, uncertainty, or sleepless nights, you don’t have to handle it alone. Talking to a licensed debt relief attorney at The Wink Law Firm can help you make sense of your options and choose the one that’s best for your future.
Fill out our online questionnaire at winklawfirm.com/questionnaire to get started.