SBA Does Not Allow EIDL Loans to be Compromised Through an Offer in Compromise

Written By Kevin McKernan

The SBA's current position is that they do not allow EIDL loans to be settled through an OIC. While the OIC program is available for other types of SBA loans, EIDLs remain excluded from this option. 

The options to settle SBA loans are provided below: 

1. Hardship Accommodation Plan 

2. Loan modification 

3. Hardship deferment 

4. Full Loan Repayment from business or personal assets, if possible 

5. Liquidation of Business Assets 

6. Refinancing your existing SBA loan with a private lender and using the loan proceeds to pay down or payoff the SBA loan 

7. File for bankruptcy. If the SBA EIDL loan exceeded $200,000 and an individual or entity guaranteed the loan, both the SBA borrower and guarantor may need to file for bankruptcy to discharge the SBA loan 

8. Default on the SBA loan and engage in Asset Protection Planning in case of legal action by the SBA or the Treasury Offset Program 

This document is designed for general information only. The information presented in this document should not be construed to be formal legal or tax advice nor the formation of a lawyer/client relationship. 

For more information on this and other topics, please contact Kevin via any of the channels listed below:

📧 kevin@kmckernan.com  | 📞 718-317-5007

Kevin McKernan
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