Donna Genie reports from an SBA South Carolina forum on what happens to EIDL loans when businesses close. The district office says borrowers should keep paying and contact the loan servicing center, but Genie doubts the Treasury can collect much from dissolved businesses with no assets or guarantees.
As promised, I want to give you a little brief update on Eidl loans for businesses that have closed down. I was on a call yesterday with the South Carolina district office of the sba. They had an open forum where you could ask any questions you like. So I popped on that forum first thing and asked what is the status of loans for of Eidl loans for businesses that have gone out of business and are no longer operating. The gentleman who answered from the South Carolina office said you should be making all of your payments as usual and you can contact the loan servicing center. This was all on chat from my side, so I put in a repeat column follow up to say what happens if the business is completely dissolved. There is no operation, there's no bank account and there is no personal guarantee. So under the $200,000 limit, the gentleman said they should still continue to make their payments and he suggested that if the loan is still out there that the treasury can go after them in other ways. I'm quite puzzled by this because what other way is there? If a business doesn't exist, doesn't have any assets, doesn't have any money, and there is no personal guarantee of the owner, there is nothing to go after. I frankly don't think the gentleman had any idea what I was dealing with the situation on Eidl loans for the businesses that have closed. He sounded quite like a robot and just said they should keep making payments. Now we all know that's not a possibility. If a business is closed, they have no money, they're not going to make payments. So my take on this is the SBA still doesn't have a plan, so we're going to keep watching and I'll keep asking those questions. When they come up with these periodic events, I will keep asking the questions. The news for you is there really is no change. Keep at it the same way. If you'd like to contact the Loan Service Servicing center, please let me know what you hear from your end and I'll be sure to keep everyone posted on the latest and greatest in the Eidl default crisis.
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