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What can I do if I Can’t Pay My EIDL Loan?

When you’re facing challenges in repaying your Economic Injury Disaster Loan (EIDL), one viable option is to explore an EIDL Offer in Compromise. An EIDL Offer in Compromise (OIC) is a relief option provided by the Small Business Administration (SBA) for borrowers who have taken an Economic Injury Disaster Loan (EIDL) and are experiencing financial hardship that makes it difficult or impossible to repay the full amount of the loan.

EIDL Offer in Compromise:

  1. Purpose: The primary goal of an OIC is to provide a feasible solution for both the borrower and the SBA when the full repayment of an EIDL is not possible due to the borrower’s financial situation.
  2. Negotiation of Debt: It involves negotiating with the SBA to settle your EIDL debt for less than what is owed. This is typically pursued when you can demonstrate that your financial condition prevents full repayment.
  3. Submission of Proposal: You submit a proposal to the SBA, offering to pay a lesser amount than the total outstanding loan. This proposal should include a detailed explanation of your financial hardship, along with supporting documents like financial statements.
  4. SBA’s Evaluation: The SBA will review your proposal, assess your financial condition, and determine whether accepting your offer is in the best interest of the government. The decision is based on various factors, including your ability to pay, income, expenses, and asset equity.
  5. Resolution Agreement: If the SBA accepts your offer, they will provide a resolution agreement. This agreement will outline the terms of the settlement, including the reduced payment amount and any other conditions.
  6. Impact on Credit and Operations: While an OIC can alleviate the burden of debt, it’s important to understand its potential impact on your credit score and future borrowing capabilities.
  7. Professional Guidance: Navigating an OIC can be complex. BLF can provide guidance through the process, helping to ensure that your proposal is comprehensive and effectively communicates your financial hardship.

Speak with a BLF expert about an Offer in Compromise.

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