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The Small Business Administration (SBA) offers loan forgiveness for some borrowers who have received an EIDL. This means that the borrower is no longer responsible for repaying the loan. However, it is important to note that loan forgiveness is not guaranteed and only available under certain circumstances.
Generally, if you are flagged for PPP fraud, you will be contacted by a federal agent from a law enforcement agency or other federal authorities regarding your loan under the CARES Act.
The Treasury Department can then garnish your wages and seize any federally held assets, such as income tax refunds or other federal monies owed to the business if you have a secured loan. If you have defaulted on an EIDL loan of more than $200,000, your personal assets can be seized.
Options for borrowers facing financial hardship. Note: The 30-month COVID-19 EIDL deferment period will not be extended. COVID-19 EIDL is not forgivable.
If your business closes next week, youre personally liable for the debt. EIDLs are not forgivable. Youll repay them over the 30-year term, though you can pay your loan off early with no prepayment penalties.
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If your business closes next week, youre personally liable for the debt. EIDLs are not forgivable. Youll repay them over the 30-year term, though you can pay your loan off early with no prepayment penalties.
Default on the SBA Loan First, the lender will seek payment from the business for the outstanding balance of the loan. However, if the business cannot pay the full amount, the lender will foreclose on the collateral pledged by the business. Your business assets may not have much value.
For sole proprietors, all business debt is personal debt because the business is the owner, and there is no separate legal entity such as a corporation. For EIDL loans in excess of $200,00, the SBA requires that loans of this size be personally guaranteed.

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