Business Owner vs SBA vs Congress


The United States Small Business Administration (SBA) is under tremendous pressure from two sides with the COVID-19 Economic Injury Disaster Loan (EIDL) program. Under the CARES Act of 2020, the loan program provided massive financial support to Small Businesses during the pandemic. 

Now, many of those loans are in default status. A default status can occur due to any number of reasons including a missed payment or three, a failure to make full payments, or a failure to make full payments, or the ultimate default: failure to make any payments at all by ignoring the debt obligation.

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On the one side is the Small Business Owner who seeks Hardship Accommodation to repay the COVID-19 EIDL due to continuing economic challenges as they manage their businesses in these post-pandemic times.

Then, there’s the powerful political pressure on the opposite side by the politicians.

We’ve seen in recent months how members of the United States Senate and the House of Representatives—Senators and Congresspeople—are thumping their chests for political talking points and demanding that SBA collect on every penny of COVID-19 EIDLs, including demanding SBA pursue collection activities against small businesses that defaulted on their loan payments.

This second aspect is probably the most brutal because these same politicians are often the same people pursuing sound bites of “Small Business is the backbone of the American economy.”  And yet…here we are.  They would prefer to beat the drums of debt collection to drive business owners into bankruptcy, to heap massive debts with penalties and interest upon their shoulders for years, or even decades to come, with nary a care about their literal constituents, the small business owners.

For our part, as SBA EIDL experts, we’ve seen all sides of this terrible situation.

As a result, we often defend the people working at SBA. We believe they are good people struggling to do their best to meet this huge task dumped on them by the politicians without the requisite support necessary for a mission of this magnitude.

A viewer of our YouTube channel commented in response to our more forgiving and understanding perspective of SBA, “Sorry folks, you’re wrong the SBA doesn’t care…”

We responded, “You’re attributing some nefarious quality of personality to a bureaucracy. That is, on the face of it, absurd.”

We’ve spoken to hundreds of SBA representatives and the majority truly do care about their constituents, the small business owner.

What you need to do is to blame the Congress of the United States for this debacle because the SBA is underfunded, overworked, and overwhelmed as an agency tasked with such a massive undertaking, both during and after the pandemic.

First, Congress required this tiny federal agency to manage the distribution of the huge tranche of pandemic relief funds to small businesses. As task for which SBA was ill-prepared and inexperienced.

Second, Congress is now beating the drum about collecting on the debts with no regard for either the small business owners facing economic challenges nor the SBA inexperience in collecting debts on such a huge scale.

The Congress has not reauthorized this federal agency in more than two decades. By comparison, in 2023, Congress reauthorized the Federal Aviation Administration, providing expanded regulatory authority and a pile of money to upgrade technology and hire air traffic controllers.

No such undertaking is in the works for the SBA.

We appreciate you as a follower of our channel, but, please, before you tell us we are “wrong,” try to take a moment and reflect on our expertise in this area, the expertise drawn from real-time experience that informs our advice, our guidebooks, our consulting services and our YouTube videos.

Sorry, but not sorry.

Business Owners Constantly Complain About SBA

We see lots of anxiety, anger, and acrimony about the Small Business Administration’s (SBA) handling of the vital pandemic relief program. We see it because of the Small Business Owners who request our consulting services for our expert advice and the folks who comment on our YouTube videos about the COVID-19 EIDL program.

We understand because we’re experienced financing professionals who feel similar frustrations, and have done so since the early days of the pandemic. There are multiple and miscellaneous dysfunctions from poor communication protocols to confusing instructions. 

Lately, the disgraceful exercise where SBA is sending loans to U.S. Treasury for default and subsequent collections without thoroughly engaging with the Small Business Borrower to work out a repayment plan.

Our opinion on this topic, especially after having worked on hundreds of EIDL applications and spoken to hundreds (or maybe thousands) of SBA representatives and thousands of Small Business Owners since March of 2020, is that, for all its dysfunction as a bureaucracy, the SBA is not to blame for the problems experienced by well-meaning and responsible Small Business Owners.

In our opinion, Congress is to blame, here, not SBA.  

In response to the pandemic in 2020, Congress dumped this HUGE project onto this tiny, underfunded federal agency to put vast quantities of money out into the American economy in the form of loans, forgivable paycheck loans, and grants.

Second, Congress (specifically certain politicians) are screaming and shouting at SBA to make every effort to collect payments on the pandemic loans including EIDLs and PPPs since late 2023. The political pressure is powerful and unnecessary.

In both instances the Congress has NOT provided the additional funding SBA needs to manage these huge enterprises.  Congress has not reauthorized SBA as a federal agency in more than two decades.

SBA is a “limited” direct lender.

The SBA doesn’t have sufficient experience as a “lender” to manage the tremendous volume of COVID-19 EIDLs that need to be repaid: 4 MILLON.

Prior to the pandemic, between fiscal 2018 and 2022, the SBA approved an average of approximately 26,284 applications per YEAR for natural disasters acting as a “direct lender.”  That number includes natural disaster loans for physical damage to small businesses, homeowners and renters.

Making natural disaster loans remains a small part of the overall SBA mission.

SBA made small business natural disaster loans on average less than 10,000 a year between 2018 and 2022.

Source: GAO Report To Congress: Disaster Loans

Quote from SBA’s recent press release on Fiscal Year 2023: $670 million in disaster assistance for small businesses: Throughout the year, the SBA stepped up in moments of crisis to deliver critical support to business owners and communities in need. FY23 saw $670 million in relief delivered to more than 5,200 businesses across America.

Source: SBA Press Release 23-90

SBA’s Mission as defined by Congress: The United States Small Business Administration aka SBA was created by an act of Congress in 1953. The legislation acknowledged the lack of working capital available to small business owners, notably women, African Americans, Hispanic Americans, Native Americans and Veterans of the armed forces.  

The legislation included the natural disaster loan component, but that was far from the primary mission of the newly-formed federal agency.

Mostly what SBA does to perform it’s mission is to provide guarantees to commercial lenders for SBA loan products, and secondarily to provide support to small business in the form of education, grants, and advice. Note the commercial lenders make the SBA guaranteed loans using the lenders’ funds, not SBA funds. SBA’s role is to make the lender “whole” in the event of a defaulted loan.

Source: Small Business Act

People are talking about filing a class-action lawsuit.

As for lawsuits, like our opinion on EIDL Forgiveness, this is a waste of time to consider, reflect on, talk about.

As of this writing SBA clearly states that COVID-19 EIDLs are not forgivable. Our opinion, based on our extensive research on this topic, is that these loans will never be forgiven.  (We hope to be wrong)

Suing the SBA is, in our opinion, similarly fantastical magical thinking.

A group of business people sued SBA during the pandemic in response to the Restaurant Relief Fund program.  These business owners claimed that SBA’s direction of funding to “priority” groups from traditionally underserved communities was unconstitutional. The lawsuit caused the program to cease assisting restaurants all across the country as SBA halted the grants in response.  

And the lawsuit was ultimately tossed out of court. A. Complete. Waste. Of. Time.

Source: Lawsuit

Whether you are struggling with repaying your COVID-19 EIDL, or if your business has already failed, or you are managing (or soon to begin) repayment, we recommend the following strategy: Focus on the things you can control and avoid the magical thinking of inexpert people who post random nonsense on the internet because they want it to be true.

Small Business Owners can control the following:

  • Make payments

  • Check your MySBA portal weekly, especially for “messages”

  • Comply with the requirements of the EIDL Loan Agreement

  • Apply the requisite responsible diligence to this loan program to avoid problems

We offer the following assistance to Small Business Owners with COVID-19 EIDLs:

These are the options for assistance we can provide:

  • COVID-19 EIDL General Consulting: we assist with various requirements and procedures under the terms of the EIDL Loan Agreement including change of ownership, sale of assets, lien release requests, assumptions, and more. Email Curious@

  • YouTube videos: we have over 500 videos to help Small Business Owners manage the SBA’s EIDL program’s various aspects

One-Hour Consulting Call

We offer a one-hour consulting call for $275.00. On the call Trevor will review with you different aspects of your COVID-19 EIDL or, if your loan defaulted and went to US Treasury for collection, he will discuss options at this stage where your EIDL is with US Treasury:

  • Dispute

  • Negotiating an Offer in Compromise

  • Repayment plan

  • Closing the business

  • Bankruptcy

  • Long-term consequences of a defaulted EIDL

IF you still wish to book a call, CLICK HERE

US Treasury Defaulted COVID-19 EIDLs: DISPUTE

Since late December, 2023, SBA transferred massive numbers of COVID-19 EIDLs to US Treasury for COLLECTIONS. EVEN IF the Borrower was making payments and communicating with SBA about their difficulties in making full payments. This is a DISGRACE and we blame SBA’s dysfunctional systems for not providing more effective repayment strategies for people trying to repay their loans.

Is your COVID-19 EIDL transferred to US Treasury? If so, you should immediately submit a dispute to fight this egregious harm to small businesses in America.

Our US Treasury DISPUTE Consulting service is available for a limited time for $825.00.

  • Fact Collection Phone interview about repayment challenges

  • Collection of business documents to accurately complete dispute forms

  • Completion of US Treasury dispute form

  • Signature protocols

  • A completed package with supporting documents for your dispute

  • Instructions to submit your dispute

  • Ongoing strategies to dispute the default with SBA included in the package

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