HomeEconomic Injury Disaster Loans: Can I Compromise An EIDL Loan?

Economic Injury Disaster Loans: Can I Compromise An EIDL Loan?

We Reduce Business Debt

Lawscape is dedicated to helping business owners successfully resolve their business debt without headaches, or long term consequences.

We Provide Nationwide Business Debt Relief

Lawscape provides nationwide business debt relief services. We work a wide array of lenders, service providers, and types of business debt. We are able to restructure and reduce, all types of secured and unsecured business debt. 

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Our team has experience handling 10’s of millions in debt, ranging from SBA debt, to Merchant Cash Advance and more. 

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Regardless of the type of business debt you have, we can help. We have experience handling all types of secured and unsecured business debt. 


Our company is led by experienced business debt relief experts who have experience handling secured and unsecured debt nationwide. 

Failing To Repay Business Debt Isn’t The End

Many business owners think failing to repay business debt means: your business is over.

This simply isn’t true. Business debt is a problem which CAN be handled, just like everything else; but only if you take pro-active steps. Lawscape helps you understand the law, and works with you to make sure that business debt isn’t the end of your business. 

What Are Some Ways We Can Help With Business Debt Relief?

Our experienced business debt relief consultants are here to help you through this stressful time. 

Don’t Let EIDL Loans Bury Your Business: Let Lawscape Guide You to Relief!

Can we agree on something quickly? Small businesses aren’t just dainty SMEs on street corners – they’re the lifeblood pumping the heart of our nation’s economy. Facts scream louder than words, don’t they? So wrap your head around this: small businesses make up 99.9% of all businesses in the U.S., contributing a massive 45% of economic activity. Yet the cruel irony is that 45% of these enterprises bite the dust within half a decade, with only 25% still standing after 15 years.

Cash Flow Crisis: The Unseen Predator in the Business World

Why this unfortunate turn of events, you might wonder? The villain is often something quite mundane – cash flow issues and the lack of proper financial management. Having enough money to grease the wheels of your daily operations can get derailed after any disaster, be it an economic downturn or a natural catastrophe.

That’s where Economic Injury Disaster Loans (EIDL) come into play. These loans are a lifeline for small businesses, nonprofit organizations, and agricultural cooperatives operating in declared disaster areas. The recent pandemic forced countless businesses to resort to these loans to counter the harsh economic blow.

Maybe you now find yourself unable to repay your EIDL loan. So what’s next? Is there a way to compromise your EIDL? Well, you’re about to get familiar with this and many other options to prevent that dreaded loan default, and, of course, Lawscape is here to help you navigate these choppy waters!

A Quick Primer on EIDL Loans

EIDL is a federal loan program designed to help businesses recover after a disaster. In the case of Covid-related EIDL loans, your business doesn’t need to have suffered physical damage – the key criterion is economic harm. Loans can amount to a hefty $2 million. To qualify, your business should be within a disaster-declared county or its neighboring county.

Understanding the Repercussions of a Default

Maybe you’re facing a cash crunch and can’t make your loan payments. This situation can escalate to a loan default with rather severe consequences. Some repercussions are:

• Risk of collateral seizure.
• Seizure risk extends to guarantors’ assets.
• Issuance of a payment demand letter from the Small Business Administration (SBA).
• They could initiate legal action.
• Default reflects on your credit score.

However, it’s not all gloom and doom. There are ways to triage this situation. Even a symbolic gesture of making any payment against your loan might work in your favor. As default looms, consulting with an experienced attorney like Lawscape is your best bet.

The Lawscape can help prevent a lawsuit from being filed. One of the strategies we employ is assisting you in filing an offer in compromise for your personal liability.

Taking the Compromise Route: Offer in Compromise (OIC)

COVID-related EIDL loans below $200,000 didn’t need a personal guarantee, so only your business assets are in danger. But if your loan crossed the $200k mark, exploring an offer in compromise might be your saving grace. In 2020 alone, 1 in 6 businesses ended up with an SBA loan default exceeding $30,000. So what is the first step? Understanding an offer in compromise (OIC).

An OIC must be filed using the SBA Form 1150. Certain crucial data are critical for the SBA to process your request:

• A letter explaining your financial hardship.
• Documentary evidence supporting your hardship.
• A completed and signed SBA Form 1150.
• Clearly establishing your fund source for the offer.
• Borrower’s Consent to Verify Information and 3rd Party Authorization signed by every SBA borrower and guarantor.
• A completed and signed Financial Statement of Debtor (SBA Form 770).
• Recent bank and investment account statements.
• Most recent pay stubs.
• Last two-pronged federal income tax returns, including all schedules.
• Verification of income from borrower and guarantor not previously identified.
• Up-to-date financial statement.
• Copy of business dissolution, if needed.
• UCC Lien searches of business assets held as security on loan, if relevant.

This information will be essential in crafting your OIC. If it includes the release of loan collateral, you’ll need to provide a collateral valuation and other relevant documentation.

Victory or Defeat: OIC Approval or Denial

If the SBA greenlights your OIC, your loan will be classified as compromise/closed and no further attempts to collect against that loan will be made. Your name will be removed from the Treasury offset program, releasing you from tax refund offsets and wage garnishment.

Do note that as you couldn’t fully pay back your loan, your borrowing capacity from federal agencies in the future might be hampered.

Sometimes, the SBA might deny your OIC or only agree on certain points, resulting in a counteroffer. If this happens, discuss the offer with Lawscape – no decision should be taken lightly.

If your SBA loan gets referred to the Treasury Department, a collection surcharge could be in store. Todd can advise on the risks of countering the SBA counteroffer.

Tick Tock: SBA Loan Default Statute of Limitations

Here’s a bit of legal jargon: the fed government has 6 years from the date your right of action accrues (i.e., when your right to sue initiates), to bring a default lawsuit against you. Although post this date, lawsuits can’t be filed, the SBA can still use offset collections. Translation? Your wages and tax refunds, even your social security, military pension, or government benefits could be at risk.

EIDL Loan Deferment Extension

The SBA offers EIDL loan deferments, extending the first payment due date. The extension and first payment vary based on the loan date:

• 2020 loans: you have 24 months from the note date.
• 2021 loans: 18 months from the note.
• Loans before 2020: a third 12-month deferment; regular payments resume post March 31, 2022.

However, interest keeps ticking during the deferment, so think about making voluntary payments if possible.

Say Goodbye to EIDL Worries with Lawscape

Staring at a pending EIDL loan and assessing risk can make anyone overwhelmed. Lawscape can steer the ship for you in this storm. With his specialized expertise in SBA Offers of Compromise cases and nationwide representation, Todd and his team can help you get out of debts over $30,000 before the Treasury Department’s Bureau of Fiscal Service and the SBA.

Connect with Lawscape, and let Todd guide your business out of troubled waters. Get in touch via chat, use our online contact form, or buzz us at (833) 428-0937 for a case evaluation.

Why Put Your Trust in Us?

• Millions of dollars in SBA Debts handled via OICs and Negotiated Repayment Agreements
• Extensive experience in handling Treasury debts and offering representation before the SBA and the Bureau of Fiscal Service
• Customized solutions to avoid bankruptcy or home foreclosure

Lawscape Can Help You Manage Your Business Debt

If you’re struggling with business debt, we can help you understand your situation. During the initial consultation, we’ll go over the contract, and other legal documents you signed. After that, our firm will work with you to get a better understanding of your situation, and help you come up with a game plan that keeps your business alive. 

We Handle It All


Merchant Cash Advance


SBA Debt Relief


Secured Business Debt


Unsecured Business Debt

Everyone has different types of business debt. What matters is that you take it seriously. Regardless of whether it’s secured, or unsecured, you need to work with a firm that understands how to negotiate, reduce, settle, and manage, this business debt. 

Discuss your situation today

We are here to help you, and want nothing more than to help you save your business. Speak to our business debt relief specialists today.

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