EIDL January 2025 Update on OIC Forgiveness, Hardship Accommodation Program, and Sale of Collateral

Hey guys, my name is Jason. I'm the founder of Distress Loan Advisors. If you wanna book time with me, there is a link below. I know I haven't made a video in a while because honestly, there's not a whole lot that's changed, but now that we're into 2025, figured I would just sort of do a little refresh and recap what I know about what's going on in the world of EIDL loans. So the most common question I get by far is, what do I think is gonna happen when the administration changes in January? My view is that it's going to make it less likely that offering compromise is gonna be an option. And I don't really have a ton of evidence or reasons other than I know with student loan forgiveness, that was initiated by Democrats and supported by Democrats and it was opposed by Republicans. And so we're gonna have Republicans in control of things, which means if history is our guide, they're gonna opt more towards being more aggressive with collections than they are just general forgiveness. So that's my best guess. Other than that, in 2025, I'm hoping that they'll either finally implement some version of the offering compromise. Maybe the political winds will change and all of a sudden it'll become popular. Beyond that, if they're not willing to do the offering compromise, my other hope is that they start extending the hardship accommodations, in particular the 10%, because the vast majority of people that I talk to who have the hardship accommodation can usually pull off the 10%. Once they get to 50%, most people can, and 75% most people can. So hopefully at some point in the near future, once everybody who's exhausted their hardship accommodation for the 10% starts defaulting, they'll realize that they have to offer more help. Beyond that, just some general reminders. One, if you sell your business and you sell your business assets, you need to get the SBA's permission. I've had plenty of people call me and say, oh, I sold the stuff. I didn't realize I had to tell them and then I used the money to pay off my credit cards. The SBA will take issue with that. They call that fraudulent conveyance and they may refer you to the inspector general, which is the area of the federal government that oversees fraud, waste, and abuse. So bottom line is, if you're going to sell any assets outside the ordinary course of business, meaning if you're a retailer, you can certainly sell your inventory as you normally do. What you can't do is have a fire sale and sell it all in bulk at a discount. Likewise, if you're not in the business of selling, say, restaurant equipment, you can't simply sell that stuff and say, well, now I sell restaurant equipment in addition to pizza. Doesn't work like that. Beyond that, collection tactics. I've told many people this and I'll say it again. Right now, from everything that I've seen and heard, and I'm still talking to a lot of people, the SBA has not sued people who have defaulted on EIDL loans with the exception of those who have committed fraud. So if you lied about the size of your business, what your revenues were, you sold someone else's tax ID, or you used the funds to go buy a beach house or a boat that had nothing to do with your business, those people, not only are they pursuing them, they're pursuing criminal charges, and I see articles in the news every single day that people are going to jail. So with that exception aside, if you default on your loan, it's unlikely that you're gonna get sued. Right now, they're still not referring a ton of people to the Treasury, but I would imagine at some point that'll start happening again. For those who don't know, there was a period, maybe about six months ago, yeah, early 2024, early to mid 2024, where a bunch of loans had been referred to the Treasury, and then all of a sudden, people couldn't reach the Treasury because there were so many people who had been referred. So then the SBA pulled them back, and the SBA said, well, now we can hold these loans for up to two years. Please don't misquote me. I'm not saying they will hold it for two years. I'm saying they will hold it for up to two years, meaning they can refer it anytime they want. Right now, it doesn't appear that they're doing that, but that seems to be the worst thing that's gonna happen if you don't pay as they'll refer it to the Treasury, and they'll put you in the Treasury Offset Program. Not as big a concern if you just have a legal entity like an S Corp or an LLC. If you have a personal guarantee, it's certainly more of a concern. So that's about it. That's all I can think of. Just wanted to come in and give the early 2025 recap of what's going on, what you need to be aware of. And as always, if I hear anything new, I will come right back here and let you guys know. And so for that reason, if you wanna subscribe, that would be wise, because I don't do a newsletter or anything like that. So this is where you're gonna get the latest and greatest information. All right, that's it. Thanks for checking in. I'll see you on the next one.