Financial Hardship and EIDL Loans
Many businesses throughout South Florida are currently paying back business loans that were provided through the Economic Injury Disaster Loan (EIDL) program. A majority of EIDL loans were issued through the COVID-19 EIDL program for small businesses struggling with pandemic-related difficulties, but EIDL loans are not solely related to the COVID-19 pandemic. Beyond COVID-19 financial impacts, EIDL loans can also become available to small businesses, small agricultural cooperatives, and private nonprofit organizations when they are “located in a declared disaster area” and they “have suffered substantial economic injury,” according to the US Small Business Administration (SBA).
Whether your business is currently trying to repay a COVID-19 EIDL loan or an EIDL loan after one of the more recent hurricanes that affected South Florida, your business may be struggling with the payment amounts. If your business is in this difficult situation, it is important to understand the financial hardship options available to you through the SBA. Our business law attorneys in West Palm Beach can provide you with more information.
Hardship Accommodation Plan for COVID-19 EIDL Has Closed
Business EIDL borrowers should know that the Hardship Accommodation Plan (HAP) for COVID-19 EIDL loans closed on March 19, 2025. What that means is that you are no longer able to seek a hardship accommodation under this plan if your business is struggling to repay a COVID-19 EIDL loan.
Just because the HAP for COVID-19 is no longer an option, however, does not mean that you do not have any other options to consider. As the SBA suggests, you may be able to access new capital or to seek certain tax benefits that can help your business. You may also be able to consider other options that could help with loan repayment.
Requesting a Modification from the SBA
To reiterate, although the HAP is no longer an option if your business is struggling with a COVID-19 EIDL loan, this does not mean that you have no options. Your business law attorney may be able to seek a modification of the terms of your loan from the SBA, or an extension of your loan terms, especially if you can show that your business’s financial difficulties are only temporary.
In the event that you and the other owners make the difficult decision to close the business, it will be important to discuss other options for EIDL repayment with your attorney. It may be possible to settle the remaining debt, for example, or to work out a repayment plan with the SBA. If you made a personal guarantee, it will be particularly important to ensure that you have an experienced lawyer who maintains contact with the SBA until you have reached a solution. Otherwise, you can become personally liable for the EIDL loan your business owes.
Contact Our West Palm Beach Business Law Attorneys Today
If your business received an EIDL loan and is going through financial hardship, you may have multiple options for managing the terms of your loan and repayment. Although the Hardship Accommodation Plan for COVID-19 EIDL loans is no longer open for applications, one of the experienced West Palm Beach business lawyers at Kelley, Fulton, Kaplan & Eller can speak with you about other modification options, or the possibility of a Chapter 11 bankruptcy filing for your business. Contact us today to learn more about how we can assist you.
Sources:
sba.gov/funding-programs/disaster-assistance/economic-injury-disaster-loans
sba.gov/funding-programs/loans/covid-19-relief-options/covid-19-economic-injury-disaster-loan/manage-your-eidl
