What can I do if my SBA COVID EIDL loan has gone into collections with unrecorded payments?

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Liz

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Let's go through some steps you can take to address this situation:

1. Contact the SBA Directly: Reach out to the SBA to discuss your situation. Explain that you have made payments that were not recorded and express your desire to resolve the loan by setting up a payment plan without penalties. Request a detailed statement of your account to verify all payments made and any discrepancies.

2. Gather Documentation: Collect all records of payments you've made, including bank statements or receipts, to support your claim that some payments were not recorded. Keep any correspondence you've had with the SBA regarding your loan.

3. Negotiate Terms: Once you have all your documentation, negotiate with the SBA to have the loan brought back from collections. Explain your willingness to pay off the loan monthly and request the removal or reduction of penalties. Be prepared to propose a reasonable monthly payment plan based on your financial situation.

4, Consider Legal Assistance: If negotiations with the SBA are not successful, consider consulting with a lawyer who specializes in debt resolution or SBA loans. They can provide guidance on how to proceed and may help in negotiating better terms.

5. Explore Alternative Solutions: If the SBA is unwilling to negotiate, you might explore other options such as refinancing the loan through a private lender or seeking assistance from a debt relief agency.

SBA form 770 - Financial Statement of Debtor

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I have an outstanding COVID EIDL loan that went into collection. I owe over $230,000, including $80,000 in penalties alone. I originally thought that my loan would be forgiven. I have made several payments to the SBA since 2025, two of which were recorded, and others that weren't. Now that this is about to go to a private collection agency, I would like to resolve this by 1) getting the loan back to the SBA, and 2) paying it off monthly, without the penalties. What is my best course of action to resolve this fully?

Lexi, Chatbot

I understand how stressful it can be to deal with an outstanding loan and collection issues. Have you received any formal communication from the private collection agency regarding your loan?

No.

Lexi, Chatbot

Have you previously communicated with the SBA about your situation or attempted to negotiate the terms of your loan?

Yes.

Lexi, Chatbot

Is there anything else the lawyer should know before I connect you? Rest assured, they'll be able to help with your loan resolution.

No.

Liz

Hi there! Welcome. My name is Liz and I've been an attorney for more than a decade, and I am here to assist with your legal concerns. Just so you are aware, our service is a legal information only site. No attorney-client relationship is formed from our conversation.

Liz

Let's go through some steps you can take to address this situation:

Liz

46,034 satisfied customers

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