HUNT + CO.
Advisors
Client Briefing
July 2026

COVID EIDL Loans: Where Repayment
Actually Stands in 2026

If your business still carries a COVID-era Economic Injury Disaster Loan, the terms have not softened the way many owners have been told — and the collection environment changed materially this spring. Here is what is accurate.

A COVID EIDL cannot be forgiven.

The SBA states it on its own settlement form: COVID EIDLs are not able to be forgiven. Congress has discussed rate cuts, interest-free deferments, and cancellation, but nothing has been enacted. Broad forgiveness has happened twice in the history of SBA disaster lending — Hurricane Betsy in 1965, and PPP. A plan that assumes cancellation is not a plan.

Commonly mistaken for forgiveness

  • The EIDL Advance. The $10,000 original, $10,000 Targeted, and $5,000 Supplemental advances were grants — never repayable, already resolved. Only the loan portion remains.
  • PPP. A separate program, built with forgiveness provisions from the start. Same era, entirely different rules.
  • "Everyone is only paying interest." No interest-only option has ever existed. On a 30-year note at 3.75%, an early payment is mostly interest by design. That is amortization, not relief.

Relief that does exist

Hardship Accommodation Plan 10% of the monthly payment for six months. Ended March 19, 2025.
Payment reduction 50% of the monthly payment for six months. Currently available.
Offer in Compromise Settlement below the balance. Requires permanent closure and full liquidation; no confirmed EIDL approvals to date.

Neither reduction cancels debt. Interest keeps accruing and full payments resume, which can enlarge or create a balloon at maturity.

Why staying current matters more than it did a year ago

March 31, 2026
SBA's authority to keep servicing defaulted EIDLs in-house expired.
562,000 loans
$22.2 billion in delinquent EIDL and PPP debt referred to Treasury and the DOJ on April 24, 2026 — the SBA's largest referral on record.
~28–30%
Collection fee added to the balance once Treasury takes the file.

After transfer, borrowers face offset of federal payments including tax refunds, administrative wage garnishment, and potential litigation. The SBA can no longer negotiate — Treasury controls the file. A borrower still paying, even uncomfortably, holds a materially stronger position than one who has stopped.

Your loan tier drives your exposure

Up to $25,000 No collateral, no personal guarantee.
$25,001 – $200,000 UCC lien on business assets. No personal guarantee.
Over $200,000 Collateral plus a personal guarantee from every owner holding 20% or more.

Loans above $50,000 also required a best-available mortgage on owned real estate.

What we recommend

  1. Pull your actual position. Confirm balance, accrued deferment interest, and whether a balloon sits at maturity in the MySBA Loan Portal.
  2. If you are solvent and operating, keep the loan. At 3.75% fixed for 30 years it is likely the cheapest capital on your balance sheet. Do not accelerate or refinance it.
  3. Treat the 50% reduction as a liquidity bridge — never as debt reduction.
  4. Talk to us before you miss a payment. Options narrow sharply once a loan defaults and transfers out of the SBA's hands.

General information for Hunt + Co. Advisors clients, current as of July 2026. Not legal advice. SBA policy on this program has changed repeatedly and may change again. Guarantee enforceability, settlement strategy, and bankruptcy treatment are legal questions — we coordinate with SBA workout counsel where those are in play. Verify your own terms against your note and the MySBA Loan Portal before acting.

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