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The Money Desk · Blog
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Can You Get Relief From a COVID-19 EIDL Loan You Cannot Repay? Options to Explore

SBA offers eligible COVID EIDL borrowers temporary payment assistance, not forgiveness. Your options depend on eligibility, loan status, business operations, and whether Treasury has taken over servicing.
From TheFinanceBase Team5 min to read
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Yes, but the available relief depends on your loan’s status and the reason you cannot pay. For eligible COVID-19 Economic Injury Disaster Loans (EIDLs), the SBA offers a temporary payment-assistance option: a 50% payment reduction for six months. It does not forgive the loan, and interest continues to accrue. If your loan is delinquent, charged off, or with Treasury, different rules and contacts may apply. SBA says COVID EIDLs cannot be forgiven; it considers an Offer in Compromise only after collateral liquidation under its guidelines.

These published rules are specific to COVID EIDLs. Other EIDLs and SBA loans may have different terms. Your signed loan documents, current account status, and any notices you received determine what applies to you.

Which kind of relief may fit your situation?

Your situation Route to explore Key condition or limit
Temporary cash-flow problem; loan is current or less than 90 days past due Request SBA payment assistance through the Loan Portal Eligible borrowers may receive a 50% payment reduction for six months; interest continues to accrue.
Loan is charged off or marked uncollectible, but not referred to Treasury Cross-Servicing Ask SBA about conditional reinstatement SBA’s published instructions call for paying the full overdue balance through the portal before requesting reinstatement.
Loan has been referred to Treasury Cross-Servicing Contact Treasury using the referral notice or SBA’s published direction SBA says it cannot assist with the account after the transfer.
Business is closing or being liquidated Contact COVID EIDL servicing through the Loan Portal or by email Contact SBA about the loan and collateral before disposing of collateral or winding up the business.
Considering a settlement or bankruptcy Review SBA’s Offer in Compromise requirements or consult qualified legal counsel An Offer in Compromise is considered only after collateral liquidation; acceptance is not guaranteed. Bankruptcy outcomes depend on the case.

The table is a starting point, not an account determination. Check the Loan Portal and your notices before choosing a route.

Can you reduce your EIDL payment temporarily?

SBA says eligible COVID EIDL borrowers may request a 50% payment reduction for six months through the SBA Loan Portal. The assistance is temporary: it does not reduce or cancel the principal, interest is not waived, and full payments resume after the assistance period. SBA warns that continuing interest increases the balloon payment due at the end of the loan term. SBA also says eligible loans may use this option once every five years.

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Published eligibility requirements

At the time of the request, SBA’s published criteria require that:

  • The loan is current and less than 90 days past due.
  • The business is actively open and operating.
  • Neither the borrower nor the owners are in active bankruptcy proceedings.
  • The difficulty is temporary or cash-flow related, rather than a long-term financial challenge.

For loans originally approved for more than $200,000, SBA says to email [email protected] if the payment-assistance request is not available in the portal. Confirm availability and your account-specific eligibility with SBA before relying on a reduced payment.

What if your EIDL is delinquent?

SBA says failure to make required payments may lead to referral to the Treasury Offset Program after 120 days of delinquency. It also says loans that meet specific delinquency criteria may be transferred to Treasury Cross-Servicing. These are distinct collection actions; a delinquency date alone does not tell you whether your particular loan has been transferred. Check your account and any notices you received.

If Treasury Cross-Servicing has started

Once the loan is in Cross-Servicing, SBA says it is no longer the servicer and cannot assist with the account. Contact Treasury as directed in your notice. SBA’s published direction lists the Treasury number as 800-289-7388; check your notice for the applicable contact instructions.

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If the loan is charged off but has not gone to Cross-Servicing

SBA describes a conditional path for a loan that is charged off or marked uncollectible but has not been referred to Cross-Servicing: submit the full overdue balance through the SBA Loan Portal, then contact COVID EIDL servicing to request that the loan be reinstated to current status. This is a request, not a guarantee that SBA will reinstate every account. Confirm the amount due and your status with SBA before paying.

What if your business is closing?

SBA directs borrowers anticipating business closure or liquidation to message through the Loan Portal or contact COVID EIDL servicing. Reach out before disposing of collateral or closing out the business, because your loan’s collateral and servicing requirements may affect what steps you need to take. Do not assume closing the business automatically ends the debt or releases collateral.

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Can SBA forgive or settle a COVID EIDL?

SBA states that COVID EIDLs cannot be forgiven. These loans are not PPP loans, so PPP forgiveness rules do not apply.

SBA’s Offer in Compromise Requirement Letter, last updated August 11, 2026, says an Offer in Compromise will be considered only after liquidation of all collateral under agency guidelines. That is a sequencing requirement, not a promise that SBA will accept an offer. The public guidance does not establish whether an individual borrower has completed the required liquidation or whether a proposed compromise would be accepted.

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What do your original loan terms mean for repayment?

SBA describes COVID EIDLs as direct loans that must be repaid, with a 30-year term. Program-level fixed rates were 3.75% for businesses and 2.75% for private nonprofits. Payments were deferred for the first two years, but interest accrued during deferment. SBA also says collateral was required for loans over $25,000 and a personal guaranty for loans over $200,000. These are program-level terms; your signed note and account record govern your individual loan.

How to contact SBA and check your next step

  1. Sign in to the SBA Loan Portal. Review your loan status, payment history, and available servicing options.
  2. If the problem is temporary, check payment-assistance eligibility. Submit a request through the portal if available. For a loan originally approved for more than $200,000, use SBA’s email instruction if the option does not appear.
  3. If the loan is charged off, verify its status and overdue balance. Ask SBA whether it has been referred to Cross-Servicing before following the conditional reinstatement steps.
  4. If Treasury Cross-Servicing has begun, contact Treasury. Use the contact details in the notice or SBA’s published direction; SBA says it cannot service the loan after transfer.
  5. If the business will close or liquidate, contact COVID EIDL servicing. Include your loan number, the reason for contacting SBA, the business or applicant name, and your contact details.
  6. Use current payment and contact instructions. SBA lists [email protected] and payment by phone at 833-853-5638. SBA says it stopped accepting paper checks effective October 1, 2025, so follow its current electronic payment instructions.

When to get legal or financial advice

Active bankruptcy proceedings by the borrower or owners exclude a borrower from SBA’s published payment-assistance eligibility. That does not, by itself, determine whether a particular EIDL can be discharged or what a bankruptcy would mean for a guaranty or collateral claim. If you are considering bankruptcy, speak with qualified counsel familiar with business debt and the law in your jurisdiction. SBA also points borrowers to its District Offices or Resource Partners for business counseling.

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