Donna Genie calls the SBA about what happens to EIDL loans when businesses close. Send your Secretary of State dissolution document and closure details to the COVID EIDL Servicing Center at 833-853-5638. The SBA may refer unpaid loans to Treasury for collection, a process that can take years.
Questions this video answers
800-736-6048
833-853-5638
$150,000
The dissolution paperwork from the Secretary of State (statement showing the business has been dissolved), plus details on closure date, reason, and bank/account status.
Chapters
All right. We are going to call the SBA to ask about Eidl defaults and I'm going to have you listen in to their response.
Welcome to the U.S. small Business Administration. The this call is being recorded for training and compliance purposes. For assistance In English, press 1.
Para assistencia en estanor.
Thank you for calling the COVID Economic Injury Disaster Loan Customer Service Center. Whether you need help setting up payments, navigating the MY SBA Loan portal, or getting your payment information, SBA representatives are here to help you manage your Covid Eidl loan. Please note, Covid auto loans are not forgivable and the 30 month deferment period has not been extended. If you are returning a call from your loan officer and know their extension, press 8. The next available agent will be with you as soon as possible. Please have your SBA loan number or Social Security number ready. Thank you for calling Small Business Administration Customer Service.
My name is Rebecca, age of 90.
I am calling as a CPA on behalf of a general question, not specific to a loan.
Okay.
And how can I help you today?
I'm trying to find information about how the process works if a business has closed and the loan will be defaulted. I have a business client with $150,000 EIDL loan and they are out of business. It has been dissolved through the Secretary of State and there are no bank accounts or assets. So we're trying to figure out how we proceed to get this loan cleared and off the books. Can you help me with the process?
So you'll have to speak with the loan servicing center.
Okay. How do we get in touch with them?
Okay.
I wouldn't know which servicing center that would be.
How about Birmingham? Let's try Birmingham.
Okay, I can give you the number.
Okay.
It's 800-736-6048.
Okay. And is there any particular department or requests that I should make to get to the right person?
Nope.
You just call in and get that agent that's available.
All right. Thank you.
You're welcome.
Is there anything else I can assist with you today?
No, thank you. All right, so we'll make another call.
Thank you for contacting the United States Small Business Administration. Birmingham Disaster Loan Servicing Center.
One hour later did you know many.
Questions about your loan can be found by creating a borrower portal account? Ask a representative for instructions.
Several days later.
Please wait while we transfer you over to our next available representative. Did you know many questions about your loan can be found by creating a borrower portal account? Ask a representative for instructions.
16 paranoia filled days later.
Please wait while we transfer you over to our next available representative. Did you know many questions about your loan can be found by creating a borrowed portal account? Ask a representative for instruction.
Thank you for calling Scenarios to Samantha. May I help you?
Hi, I have some questions about an Eidl loan for a business that has closed and is no longer in business. More general questions.
What's the SBA loan number?
I don't have that information. I'm just looking for general information right now.
Okay.
Yes, our office actually doesn't handle the business closures, but I can see if I can assist you with your questions.
Okay, who handles the business closures?
Yes, ma', am, it's our office, the COVID Eidl Servicing center. And I can give you their number.
Okay.
If you would. That'd be great.
It's going to be 833-853-5638.
I already called them and they sent me to call you.
Yes, I mean, they are the office that handled the business closures.
Okay, well, let me ask you my questions then, because they were of no help and just basically told me they didn't handle that and to call you. So I have a business that has a $150,000 EIDL loan and they are out of business. They have dissolved through the Secretary of State and they have no assets. And I'm trying to figure out what the procedure is to notify the SBA that they are out of business and the loan will be defaulted. And how we go about that.
You'll need to send them. You'll need to send their office an email address, and I can give you that email address.
Okay, and what do we send them?
Just the dissolution paper and that the business.
Okay, and then what's the process from there?
You would need to contact them. You know, you can.
Okay. But there's no personal guarantee or collateral, so I'm not sure how that would happen.
Yes, and. Well, the loan could be referred to treasury, but it would just be in the name of the business which is closed.
Right.
The principal would still be listed on the loan. It's not personally liable.
Okay, so what would that do? To refer it to the treasury if they're out of business?
Yes, and that's just the protocol they would file. I mean, follow, unfortunately. I mean, I don't have any other information for that because we don't handle those type of loans here.
Okay. And if they are, if there's a loan that is larger than that, and they do have a personal Guarantee? How does that differ?
Yes, and? Well, the personal guarantee would still be liable for the loan.
Okay. But, I mean, what's the process? How is that process different? Does it just get still referred to the treasury the same way, but just for personal and the business?
Yes, it would still be referred to treasury the same way.
Okay. All right. And do you have any idea on the timeframe of how long it takes to get this closure process taken care of? It seems that I've had several people tell me that they have sent the information but have not received any response.
Yes, ma'.
Am.
Fortunately, I don't work in that office. I don't know their specific timeline.
Okay, and is there some other way to get in touch with the business closure? Because, like I said, they answered me and told me to call Birmingham or call the service center for the local area.
The only option would be to contact them and just ask for someone to discuss a business closure with. But it may just be that you don't have the loan number, and that's why they won't discuss it with you.
Okay, well, I need to know the process. I am helping them. Helping the businesses who have dissolved figure out and navigate the process. So I'm not sure why they wouldn't be able to tell me the process.
Yes, ma'. Am. I'm sorry. I mean, unfortunately, that's not any information our office in Birmingham has.
Okay, so where is the office that handles the business closures? Is that handled in either of the two servicing. I'm sorry, what was that?
Dallas, Texas. Okay.
All right. Thank you very much for your help.
You're welcome. Thank you.
Bye.
Bye.
So let's recap what we learned from our SBA call today. First, you should probably just keep doing what we've professed that you should be doing for a good while now. Email the service center. Tell them that you are out of business, that your business has been dissolved. The only new piece we got there is you should probably attach the statement from the Secretary of State showing the business has been dissolved. Send that in with the prescribed format that we've used. Tell them when the business closed, when it was dissolved, why it went out of business, and that your bank accounts are closed and there are no assets. Or if there are assets, you can tell them what they are. But the important part is to email the service center. They talk specifically about their process, being that after they've marked it off on their books, they refer it to Treasury. That process, in my experience, typically takes several years before that happens. So if you were to default on some federal government obligation, they could send that over to offset any refunds or monies that were being paid to you from other government sources. Now, in the case of a business, if the business is dissolved, I wouldn't expect it to receive any further future funding from the government or refunds, so I don't think that would be a problem. And that's where I was heading with my question to her. If this was based on an individual having that loan in their individual name, yes, if you were to do refunds from the IRS in the future, it's possible they could offset that, post that money towards your loan balance, but through proper tax planning, obviously you can always plan for your taxes to make sure you're not due a refund if that's the case. So make sure that you are communicating that information with the sba and keep us posted what you learn and we'll keep everybody else informed. Please follow us on Facebook and Instagram. Please make sure to check out our blog and our website link below. Subscribe to our YouTube channel and hit the bell to be notified when we post. You can email me@donnapyaopaccounting.com.
