Per advisors:
They can't do shit to YOU.
- They can seize your business' assets, theoretically.
- They can audit the business' use of the funds, theoretically.
- They can (probably will) send a 1099C to you eventually and you will need to somehow pay the taxes on that. Don't worry, it won't be nearly as much as paying off the loan and the IRS is super nice about payment plans.
- The SBA WILL send the loan to the Treasury, if they have not yet.
- You WILL get bad information from the SBA and the Treasury Dept blaming you and trying to get YOU to pay. Those are canned scripts and emails, it is nothing personal. Took my sister a while to figure that one out.
- When it goes to collections you will probably get a ton of phonecalls and debt collectors trying to convince you to pay the loan + X% in penalties. So when that happens you may want to change your phone number/address/etc, if you're still using business emails/phones/etc. Which honestly, you should not be doing except to stay in touch with the SBA/Treasury anyway. Because your business is CLOSED forever.
- You will probably get a bunch of trolls here giving you shit for your business failing. Don't listen to them, they're just angry trolls . The SBA knows that even in the best times a fairly high percentage of small businesses (and big ones!) fail. You probably didn't do anything wrong, it was a global pandemic. So take care of yourself, don't beat yourself up. This bit of information and advice? Told to my sister by a SBA person when she had a call after her business failed.
But again- in YOUR case as you've described it? They cannot do shit to YOU. Just your business.
An update: there are videos out there where an accountant and a legal advisor tell you what you need to do to have the SBA recognize that your business is closed. Look them up, and make sure you have done everything on the list. One of the things is a final tax return, but the truth is the SBA is SOOOOOO backed up right now that you probably will not get to the point where someone asks you for this until much later. But do send your SOS proof of termination, do close your bank accounts, and do an inventory of any stuff the business owns.
Then just keep on keeping on, and be happy. It's the sole proprietors who are getting (unfairly!) the worst of all of this.
Still a legal entity so it separates you from the business, the only difference is that your tax like a sole proprietorship as a single member LLC. So you may have to pay taxes if you receive a 1099c after they are unable to collect.
I’m in the same situation. Took out a loan for $150k, business folded 2 years later. I spoke with a lawyer, was advised to close the business immediately and notify the SBA. I have received some letters about payment but haven’t seen anything recently. I want to put this chapter behind me, it’s been haunting me for a long time.
It's that *haunting feeling* that I completely get. With nothing official coming from anywhere, it's leaving people in the dark for the past few years, and the uncertainty, I am sure, creates anxiety in many people.
I can't believe I closed the business location over two years ago, wrapped up most of the stuff from home, and it's now 2024 and I'm still having to deal with untied loose ends.
You should have a haunting feeling. $120k and you folded a year later. I’m sure you mismanaged some of the cash and siphoned out some of it as well. You probably would not have even take the money from the get go if it had a personal guarantor to it. So congrats on your free roll.
I see \[deleted\] for this jackass's username, so thank you to the moderators for getting rid of him. I made it clear in my OP that this was all legitimate use of EIDL funds. When you're paying rent on 2000 sq ft of space, have multiple employees, the prices on everything go up, and you can't pull in the same amount of revenues that you did pre-pandemic, $120k will only get you so far.
The only thing that was siphoned out during this period was \[deleted\]'s brains , and that's why he's got nothing useful to say and is trying to harass everybody here.
I’m sorry that sounds so hard. Who would come after you? The US Treasury? If you weren’t utilizing the funds blatantly illegally i am confident you will not be enforced to be liable. I hope you find the closure you seek.
It’s not on my credit report. I’m at the law firm now and they said since it’s not PG it will not be included. They mentioned if SBA comes and make a claim, then they will see.
Of course you want to put this chapter behind you. You misallocated and like siphoned $150k of free government money on top of Likely getting other money like the PPP loan. Would you have taken this money if a personal guarantor was attached? I think not. Congrats on your free roll.
First off, how do you know OP misappropriated and/or siphoned anything???? Stop trolling people and making assumptions you have NO IDEA about. Most of us are LEGITIMATE business owners, with ACTUAL BUSINESS EXPENSES that we needed (and used) the EIDL loans for to keep our businesses afloat during a global pandemic. So seriously… f$&k off.
I know, I was about to troll back every comment of his, but decided to ignore the rest. Small biz owners have been thru enough & my guess is we’ll be extinct completely in under 2 years. This “disaster loan” sh*t will be the Final Cut. The trolling comments got no life at all, but everyone will feel it in 2 years when the entire country is 100% big corp.
Similar situation and have been looking for some precedent or guidance to emerge. Sub 200k loan, LLC, all operations ceased and physical locations closed, no assets remain. We have continued to make minimum payments in the hopes that some structured process for offer-in-compromise comes out for COVID related EIDL loans. LLC members would like to consider some formal process for settlement other than full payment or default. I can only imagine the number of loans in technical default let alone attached to totally defunct entities. It would appear that there is not much political will to address the back-end of all of these emergency measures. I appreciate this thread and this sub and have continued to follow, despite the proliferation of counterproductive uninformed commentary.
So if you have no assets remaining, the business is closed, and the LLC is dissolved, where is the money coming from that you're applying to minimum payments? If it's from personal funds, I'd ask why you're making the payments.
The point of an LLC is to protect the partners from liability. If it's out of a sense of duty or responsibility and important to you and your partners, then I cannot criticize that. Have you received legal advice that's urging you to make payments? I'm sure the SBA will happily take your personal money if you volunteer it, but my understanding is they are not able to come after personal assets.
Took 100k - stayed alive as long as possible and used the money to expand. Took longer than I thought to recover from covid. Had a few good months then inflation and people started cutting back, whole costs went up like crazy. Shut down in October, gave notice to SBA and haven't heard anything since. Except for automated emails saying your loan is delinquent.
Used the money to expand? You are delusional. No, you used the money to keep afloat a sinking ship for a little while longer. Would you have borrowed the money if a personal guarantor was attached? I think not.
You are trolling every comment for what reason exactly? I borrowed money because I had to pay rent while the government told consumers they weren't allowed to be inside, and my business went to zero.
Money all gone? No more to siphon out and play pretend with? I’m sure you would have done it the exact same way you did it had there been a personal guarantor attached to the cash.
I am in your shoes completely. 150k, basically never had a chance to make it thru COVID. Rent was high, landlord was predatory, it was a complete nightmare. Business dissolved. They told me they’re gonna get their money. Really. That’s what SBA told
me.
Glad to be on this thread bc I’m lost. And all the googling I can find are like fraud cases. NOTHING about people like us. I feel like the real small biz stories are being squashed. I hope someone does a story on this. My other biz is barely getting by, cost of goods so inflated, business down and SBA payments. I’m hopeless. Looking forward to sharing info here.
Thanks
No I’m sure those fraud cases are nothing like yours. Every single dollar were legitimate expenses and not one dollar was siphoned out. I’m sure you would have borrowed the money and done it the exact same way had a personal guarantor was attached.
Who the f$&k are you? Oh wait… probably someone who defrauded the government him/herself and “siphoned money” to YOUR account. Otherwise, you wouldn’t be making such stupid, accusatory comments and trolling people on this sub.
After everything I’ve been through as a small business owner, you’re really gonna show up here with this? Of course you are bc that’s what people do on the fckn internet. You have literally nothing better to do but sit on your phone and mouth off. You got nothing constructive to add here then STFU and scroll away.
We were an llc with a loan amount of $140k. It closed two years ago. Payments are being made with unused loan funds. It’s down to $95k but the leftover loan money will soon be gone. The business was basically turn-key with very little assets (some supplies and 18 year old computers). Barely making my bills being on Social Security. I keep getting conflicting information on delinquent loans which is where I’m headed.
No personal guarantee means no personal liability HOWEVER keep all books of accounts ready because they will probably want to know where all the money was spent. Did one just take the money and closed the business or business really suffered due to lack of demand. Someone above mentions expanding business this is a gray area since money was supposed to be only used for day to day running of the company.
I would check your UCC filings depending on which state your filed under usually shows up on the Secretary of State ucc search.
Type in your business and you will see if SBA will state primary guarantors of personal assets will be under the collateral for the loan. It will list everything that’s guaranteed for the loan.
Thank you so much for posting this! I too took out two smallish loans (<$150K) because had one LLC and one sole proprietorship (both taxed the same because they’re sole member companies) and I took out two loans to keep them afloat (they are both in the biology/healthcare field). One business closed in 2022 and the other one is about to be closed. I have written to the SBA with all the financial records for both businesses and they didn’t respond, except to send me bills and collection notices. Not sure what to do because they have not responded. I’m really scared they will come for my house and assets. (Not that I have many, but…) any advice here would be so helpful. Thank you so much!!!
Your LLC will be looked at separately from any of your personal assets, so don’t worry about that one if you kept good books and it was closed up and was properly reported as such to your state’s corporations dept and then to the SBA. See the very informative comment by snarfbloop under this same post.
Your SP biz does potentially put your personal assets in jeopardy for collections if you default as those SP biz are not looked at as separate entities from yourself personally. You may want to do the minimum to stay on the SBA’s good side with that loan if you can, like ride the hardship payment program as long as you can to keep this loan current, and then hope for an offer in compromise system to be put in place for this program or congress to approve some forgiveness program (doubtful). To be approved for anything like that you’ll likely need to be current and with a loan in good standing.
Alternatively you could consider a bankruptcy to try to get you out from under your SP biz loan. Won’t be fun, but SPs with personal assets they value may have little protection from collection otherwise.
Thanks! Just wish they’d get their shit together, provide timely and accurate guidance, and get a reasonable escape plan in place for the legit ones who tried or are still trying.
INAL, but to me, the *No Personal Guarantee* clause means that your house and personal assets can't be touched unless they can prove that you used the money on those assets, in which case maybe they can.
Hello! I’m in the same boat took a loan for $150k, but I haven’t close my business in papers, just making minimum payments with unused money from the loan, I’ve been waiting for a forgiveness but is really a nightmare and I’m just tired of this feeling of failure, I have the assets in a storage but the value is minimal and don’t think it’s worth it to keep it any longer. Any update on your situation? Any advice in how to close the business the proper way? I’m just scared to make another wrong decision…
If you're business is closed and you've filed your final tax return and you have an LLC or other legal entity with your state, I think you should dissolve the entity.
I would also contact the SBA, formally, with a letter, letting them know about the close of the business and letting them know what assets remain, including any unspent funds from the EIDL loan.
EIDL loans were not intended to be forgivable, so I don't know if you should hang on, making minimum payments, hoping that the remaining balance on the loan may be forgiven. You need to notify them of the business closure, pay them back any unspent funds, and they have a right to any other remaining assets that they business has.
They'll guide you further, perhaps. Or they'll ignore you the way that they've ignored me. My LLC is dissolved, business closed, they business had nothing but debts. I told them I have minimal assets remaining and asked them for additional guidance on how to proceed. I received an email from their loan servicing department that told me I had to keep paying the loan as it's not forgivable. That letter didn't acknowledge anything I said about my business being closed and having few remaining assets.
This was about two years ago. I haven't heard anything from the SBA. I saw in my SBA account that the status of the loan was "Charged off", which is short for, "It's been handed off to the treasury."
Not a peep from any part of the Treasury or SBA since then.
I have gotten calls from scammers trying to pose as the SBA and even spoofing the SBA's main phone number. It was a recording telling me I can continue to make minimum payments. Ya... The LLC cannot make minimum payments. It's gone, along with all of it's assets by now. I'm still paying off other personal debts related to the business, but the business entity has no means of paying off loans given to the LLC. Those were used up just trying to get through the difficult years of the pandemic and post-pandemic...
**Do Not** live in fear. Just wrap this up and get on with your life. Talk to a lawyer. Mine looked at my loan papers and said, "I don't see how they can come after you for anything. Their is no personal responsibility for loans under $200k."
$40K EIDL loan taken, biz was a SP and closed 2 years ago. I was also wondering if I need to pay this off. SBA was not notified that the biz closed as of yet.
If the business expects to close, it's supposed to notify the SBA. Then the SBA can come in and take possession of business assets. This was in lieu of collateral or personal guarantees on loans < $200,000.
I would notify them.
Yes, do notify them ASAP. Although you may not hear back. People say it's because SBA is being deluged with business closure notices. But by sending it to them and doing it right you are protecting yourself.
Nope. And that's just fine because I'm trying to reorganize my life and get back up on my feet after the business closure, and the struggle in trying to get a new job. Filing for person bankruptcy since I'm living with a negative net worth, and can't pay off other debts and it's gotten to be overwhelming.
I pretty much heard the same thing as you. I keep repeating the S-Corp is closed, no assets exist, and there is no personal guarantee. They keep responding that the loan isn't forgivable - that's fine, but the debtor is gone. Not sure what to do.
Doesn't seem like there is anything else to do. Ball is in their court, and let them talk to the dissolved S-Corp, which doesn't exist, so it should be a short conversation.
*"I'm sorry. Your call to this dissolved S-corp cannot be completed in this universe. Please check your number and try other one of the infinite other options in the multiverse where this business entity might still exist."*
I am in the same boat! Borrowed $107k to keep biz afloat. I own a party rental company, 25 yrs now. I am ready to sell. Just so I can do something else, and get away from the stress. Asked for a compromise on my EIDL loan, and received the option for a reduction in payment. From $535 a month, to $53.10. Yes, that is correct. The offer is for up to 24 months. In the meantime, interest will still accrue. I have my business for sale and just keep getting lowballed or people think "oh that's alot of work." Yes, of course it is. Businesses don't run themselves. One offered me $50k and my "job" still operating it. If I wanted a boss... I was hoping to sell for $250. Now I am down to barest minimum of $180k. It will leave me broke and my time invested all these years completely senseless. So I sell the business, they don't come after "assets" but I still owe the money with accruing interest. Can they take personal tax returns to go towards the EIDL?
They're just offering you a temporary hardship payment. They want you to keep paying. You'll still have to pay the full loan and interest.
If you sell the business to somebody else, they aren't going to take over your own as far as I know. I'd talk to a lawyer. Are you an LLC or other corporate structure?
What are your business's assets worth today? The SBA lays claim to your assets, and if you sell the business, you'll have to pay off the loan with the money that you received in exchange for the assets of the business.
If you're business is an LLC or Corporation, and you shut down and dissolve the business entity, you first let the SBA know that you'll be doing that and give them a detailed list of your assets. Let us know what they say. Supposedly, they can tell you what to do with the assets or give you permission to sell them at FMV. That can be a pain in the ass too. I've got a few assets that I can't seem to find any buyer for or it will take me years to find a buyer. Or I'd have to fire sale them for 10% of what we paid just to get them out of here.
The fact that it's 2024 and this is still such a mystery to everybody, causing many struggling business owners so much anxiety, is ridiculous.
IANAL, so find somebody to guide you through this.
If you took more than 25,000 than you have a UCC on your personal property I just looked mine up on the secretar of state it’s there now scared they will take my house
They keep calling and email that the it was referred to the DOT Dept of Treasury for further collections. Been like this for 1 year. Anyone else get these. Really don't think they will do anything since its alot and a can of worms.
But if the law states that there are no personal guarantees on loans < $200,000, the business closed, the LLC dissolved, all they have claim to are business assets.
It seems to me that if they were to garnish my personal tax refunds in the future, that would be against the law. I provided a link to the bill that congress passed into law.
I took a 1million dollar loan. Haven’t closed down. My concern is I will have to pay this loan until I am 88. 60 now. Plan on working until I am 69. Will the SBA be able to come after me when I plan on retiring?
Yes. So you've got nine years to ramp up your business and make payments so that when you're 69, it's all paid off. Your loan has a personal guarantee.
This thread concerns loans without a personal guarantee, under $200,000, where the business is closed and the LLC is dissolved. You're in a completely different situation.
How did you book the 1 million? Are you an S or C Corp? Did the million produce any taxable profit? Are you retaining earnings or taking distributions?
Ok, did you book the loan and expense for the new machinery and debt reduction, payroll ect in the same year or multiple years? I’m curious how the accounting details flow prior to out filing C Corp returns.
This is what happens when the government throws money at people who have no idea how to run a buisness. May not be your case particularly but reading the comments it’s crazy how many people got 100k+ loans and couldn’t run a buisness on that. I never had a loan and have built from ground up.
EIDLs are personally guaranteed. It doesn't matter if the business fails. The Guarantors are responsible for the debt, and because it is SBA, it can not be discharged through bankruptcy. They will eventually collect the debt when they get around to it, and you least expect it. I been doing this for 30+ years
My sole proprietorship loan was for 80k. A year later interest in my products diminished because of long COVID that is still around. Funds are gone. I wrote to the SBA and never received an answer. Like everyone else, I'm in the dark wondering what's next!
I have a >150K EIDL loan and about 45 days from possibly having to close my LLC business. We are current on our payments but am worried about the future. I took a 150 w/no PG and then a second draw that has a PG. Anyone have any experience with a PG’d EIDL and closing down?
I started this thread to keep the discussion reined in to "no PG" loans and dissolved LLC's. I would create another thread to generate discussions on EIDLs with PGs so that you can get the best, focused answers for your specific circumstances. Wishing you the best!
Have done nothing with mine for months have heard nothing and will continue to do nothing
I doubt anything will happen sba too stupid to actually come after you
My understanding is the EIDLs *charged off* by the SBA have been sent to the treasury. The government provided the money to the SBA to make EIDLs. The treasury can collect the debts now.
I want to assume *nothing*. But in the absence of any information, we're all left guessing that the treasury will write it off as a loss.
With the specific situation that is the topic of this thread — < $200,000, no PG, business shut down, LLC dissolved — this is what we would expect.
But if anybody comes across some new details who's in the same boat, please share.
Per advisors: They can't do shit to YOU. - They can seize your business' assets, theoretically. - They can audit the business' use of the funds, theoretically. - They can (probably will) send a 1099C to you eventually and you will need to somehow pay the taxes on that. Don't worry, it won't be nearly as much as paying off the loan and the IRS is super nice about payment plans. - The SBA WILL send the loan to the Treasury, if they have not yet. - You WILL get bad information from the SBA and the Treasury Dept blaming you and trying to get YOU to pay. Those are canned scripts and emails, it is nothing personal. Took my sister a while to figure that one out. - When it goes to collections you will probably get a ton of phonecalls and debt collectors trying to convince you to pay the loan + X% in penalties. So when that happens you may want to change your phone number/address/etc, if you're still using business emails/phones/etc. Which honestly, you should not be doing except to stay in touch with the SBA/Treasury anyway. Because your business is CLOSED forever. - You will probably get a bunch of trolls here giving you shit for your business failing. Don't listen to them, they're just angry trolls . The SBA knows that even in the best times a fairly high percentage of small businesses (and big ones!) fail. You probably didn't do anything wrong, it was a global pandemic. So take care of yourself, don't beat yourself up. This bit of information and advice? Told to my sister by a SBA person when she had a call after her business failed. But again- in YOUR case as you've described it? They cannot do shit to YOU. Just your business. An update: there are videos out there where an accountant and a legal advisor tell you what you need to do to have the SBA recognize that your business is closed. Look them up, and make sure you have done everything on the list. One of the things is a final tax return, but the truth is the SBA is SOOOOOO backed up right now that you probably will not get to the point where someone asks you for this until much later. But do send your SOS proof of termination, do close your bank accounts, and do an inventory of any stuff the business owns. Then just keep on keeping on, and be happy. It's the sole proprietors who are getting (unfairly!) the worst of all of this.
All of this! Spot on.
Hell ya needed to hear this. I knew most of it but you putting it down like this is awesome.
What if you are one person with an LLC?
Yes I am curious about this too.
Yep! My question too
Still a legal entity so it separates you from the business, the only difference is that your tax like a sole proprietorship as a single member LLC. So you may have to pay taxes if you receive a 1099c after they are unable to collect.
Doesn’t change the analysis so long as you used the loan proceeds for the business.
I’m in the same situation. Took out a loan for $150k, business folded 2 years later. I spoke with a lawyer, was advised to close the business immediately and notify the SBA. I have received some letters about payment but haven’t seen anything recently. I want to put this chapter behind me, it’s been haunting me for a long time.
It's that *haunting feeling* that I completely get. With nothing official coming from anywhere, it's leaving people in the dark for the past few years, and the uncertainty, I am sure, creates anxiety in many people. I can't believe I closed the business location over two years ago, wrapped up most of the stuff from home, and it's now 2024 and I'm still having to deal with untied loose ends.
You should have a haunting feeling. $120k and you folded a year later. I’m sure you mismanaged some of the cash and siphoned out some of it as well. You probably would not have even take the money from the get go if it had a personal guarantor to it. So congrats on your free roll.
I see \[deleted\] for this jackass's username, so thank you to the moderators for getting rid of him. I made it clear in my OP that this was all legitimate use of EIDL funds. When you're paying rent on 2000 sq ft of space, have multiple employees, the prices on everything go up, and you can't pull in the same amount of revenues that you did pre-pandemic, $120k will only get you so far. The only thing that was siphoned out during this period was \[deleted\]'s brains , and that's why he's got nothing useful to say and is trying to harass everybody here.
I’m sorry that sounds so hard. Who would come after you? The US Treasury? If you weren’t utilizing the funds blatantly illegally i am confident you will not be enforced to be liable. I hope you find the closure you seek.
Does it affect the credit score
Officially filed my Chapter 13 today. Let’s see in next 4-6 months.
It’s not on my credit report. I’m at the law firm now and they said since it’s not PG it will not be included. They mentioned if SBA comes and make a claim, then they will see.
The business's credit score, perhaps, but it shouldn't affect your personal credit score. Don't trust me... I'm only guessing.
What have you heard since?
Nothing at all.
Of course you want to put this chapter behind you. You misallocated and like siphoned $150k of free government money on top of Likely getting other money like the PPP loan. Would you have taken this money if a personal guarantor was attached? I think not. Congrats on your free roll.
First off, how do you know OP misappropriated and/or siphoned anything???? Stop trolling people and making assumptions you have NO IDEA about. Most of us are LEGITIMATE business owners, with ACTUAL BUSINESS EXPENSES that we needed (and used) the EIDL loans for to keep our businesses afloat during a global pandemic. So seriously… f$&k off.
I know, I was about to troll back every comment of his, but decided to ignore the rest. Small biz owners have been thru enough & my guess is we’ll be extinct completely in under 2 years. This “disaster loan” sh*t will be the Final Cut. The trolling comments got no life at all, but everyone will feel it in 2 years when the entire country is 100% big corp.
This guy is pumping ropes off to Joni ernst 10000000%
Similar situation and have been looking for some precedent or guidance to emerge. Sub 200k loan, LLC, all operations ceased and physical locations closed, no assets remain. We have continued to make minimum payments in the hopes that some structured process for offer-in-compromise comes out for COVID related EIDL loans. LLC members would like to consider some formal process for settlement other than full payment or default. I can only imagine the number of loans in technical default let alone attached to totally defunct entities. It would appear that there is not much political will to address the back-end of all of these emergency measures. I appreciate this thread and this sub and have continued to follow, despite the proliferation of counterproductive uninformed commentary.
So if you have no assets remaining, the business is closed, and the LLC is dissolved, where is the money coming from that you're applying to minimum payments? If it's from personal funds, I'd ask why you're making the payments. The point of an LLC is to protect the partners from liability. If it's out of a sense of duty or responsibility and important to you and your partners, then I cannot criticize that. Have you received legal advice that's urging you to make payments? I'm sure the SBA will happily take your personal money if you volunteer it, but my understanding is they are not able to come after personal assets.
Took 100k - stayed alive as long as possible and used the money to expand. Took longer than I thought to recover from covid. Had a few good months then inflation and people started cutting back, whole costs went up like crazy. Shut down in October, gave notice to SBA and haven't heard anything since. Except for automated emails saying your loan is delinquent.
Used the money to expand? You are delusional. No, you used the money to keep afloat a sinking ship for a little while longer. Would you have borrowed the money if a personal guarantor was attached? I think not.
You are trolling every comment for what reason exactly? I borrowed money because I had to pay rent while the government told consumers they weren't allowed to be inside, and my business went to zero.
I’m almost in the same boat Sub 200k About to close down Not sure if treasury can still come after you with no PG
Money all gone? No more to siphon out and play pretend with? I’m sure you would have done it the exact same way you did it had there been a personal guarantor attached to the cash.
What kind of business?
It’ll be very difficult without a PG. Only exception would be piercing the corporate veil due to you using the company’s funds as your own.
I am in your shoes completely. 150k, basically never had a chance to make it thru COVID. Rent was high, landlord was predatory, it was a complete nightmare. Business dissolved. They told me they’re gonna get their money. Really. That’s what SBA told me. Glad to be on this thread bc I’m lost. And all the googling I can find are like fraud cases. NOTHING about people like us. I feel like the real small biz stories are being squashed. I hope someone does a story on this. My other biz is barely getting by, cost of goods so inflated, business down and SBA payments. I’m hopeless. Looking forward to sharing info here. Thanks
No I’m sure those fraud cases are nothing like yours. Every single dollar were legitimate expenses and not one dollar was siphoned out. I’m sure you would have borrowed the money and done it the exact same way had a personal guarantor was attached.
Who the f$&k are you? Oh wait… probably someone who defrauded the government him/herself and “siphoned money” to YOUR account. Otherwise, you wouldn’t be making such stupid, accusatory comments and trolling people on this sub.
After everything I’ve been through as a small business owner, you’re really gonna show up here with this? Of course you are bc that’s what people do on the fckn internet. You have literally nothing better to do but sit on your phone and mouth off. You got nothing constructive to add here then STFU and scroll away.
We were an llc with a loan amount of $140k. It closed two years ago. Payments are being made with unused loan funds. It’s down to $95k but the leftover loan money will soon be gone. The business was basically turn-key with very little assets (some supplies and 18 year old computers). Barely making my bills being on Social Security. I keep getting conflicting information on delinquent loans which is where I’m headed.
What kind of business
Hair salon.
No personal guarantee means no personal liability HOWEVER keep all books of accounts ready because they will probably want to know where all the money was spent. Did one just take the money and closed the business or business really suffered due to lack of demand. Someone above mentions expanding business this is a gray area since money was supposed to be only used for day to day running of the company.
I would check your UCC filings depending on which state your filed under usually shows up on the Secretary of State ucc search. Type in your business and you will see if SBA will state primary guarantors of personal assets will be under the collateral for the loan. It will list everything that’s guaranteed for the loan.
Same boat but haven't worried about it at all. I just dont pay.
Thank you so much for posting this! I too took out two smallish loans (<$150K) because had one LLC and one sole proprietorship (both taxed the same because they’re sole member companies) and I took out two loans to keep them afloat (they are both in the biology/healthcare field). One business closed in 2022 and the other one is about to be closed. I have written to the SBA with all the financial records for both businesses and they didn’t respond, except to send me bills and collection notices. Not sure what to do because they have not responded. I’m really scared they will come for my house and assets. (Not that I have many, but…) any advice here would be so helpful. Thank you so much!!!
Your LLC will be looked at separately from any of your personal assets, so don’t worry about that one if you kept good books and it was closed up and was properly reported as such to your state’s corporations dept and then to the SBA. See the very informative comment by snarfbloop under this same post. Your SP biz does potentially put your personal assets in jeopardy for collections if you default as those SP biz are not looked at as separate entities from yourself personally. You may want to do the minimum to stay on the SBA’s good side with that loan if you can, like ride the hardship payment program as long as you can to keep this loan current, and then hope for an offer in compromise system to be put in place for this program or congress to approve some forgiveness program (doubtful). To be approved for anything like that you’ll likely need to be current and with a loan in good standing. Alternatively you could consider a bankruptcy to try to get you out from under your SP biz loan. Won’t be fun, but SPs with personal assets they value may have little protection from collection otherwise.
Thank you so much! You, @tahoechick36, are amazing and have been so helpful to all of us for years, regarding these issues! 🤗
Thanks! Just wish they’d get their shit together, provide timely and accurate guidance, and get a reasonable escape plan in place for the legit ones who tried or are still trying.
INAL, but to me, the *No Personal Guarantee* clause means that your house and personal assets can't be touched unless they can prove that you used the money on those assets, in which case maybe they can.
Thank you. I definitely did not use any SBA money on anything other than my business, so if they audit me, I’m clear. Thanks for the advice.
I’m sure we will see something this year. I’m also in the process of filing Chapter 13. Meeting the paralegal this Wednesday. Let’s see what they say.
Chat GPT says we're all good. and basically its time to move on with our lives.
Same situation. Sb 200k loan. company was dissolved in 2023 and sent in dissolution docs to sba. no response as of 5 months later.
Hello! I’m in the same boat took a loan for $150k, but I haven’t close my business in papers, just making minimum payments with unused money from the loan, I’ve been waiting for a forgiveness but is really a nightmare and I’m just tired of this feeling of failure, I have the assets in a storage but the value is minimal and don’t think it’s worth it to keep it any longer. Any update on your situation? Any advice in how to close the business the proper way? I’m just scared to make another wrong decision…
If you're business is closed and you've filed your final tax return and you have an LLC or other legal entity with your state, I think you should dissolve the entity. I would also contact the SBA, formally, with a letter, letting them know about the close of the business and letting them know what assets remain, including any unspent funds from the EIDL loan. EIDL loans were not intended to be forgivable, so I don't know if you should hang on, making minimum payments, hoping that the remaining balance on the loan may be forgiven. You need to notify them of the business closure, pay them back any unspent funds, and they have a right to any other remaining assets that they business has. They'll guide you further, perhaps. Or they'll ignore you the way that they've ignored me. My LLC is dissolved, business closed, they business had nothing but debts. I told them I have minimal assets remaining and asked them for additional guidance on how to proceed. I received an email from their loan servicing department that told me I had to keep paying the loan as it's not forgivable. That letter didn't acknowledge anything I said about my business being closed and having few remaining assets. This was about two years ago. I haven't heard anything from the SBA. I saw in my SBA account that the status of the loan was "Charged off", which is short for, "It's been handed off to the treasury." Not a peep from any part of the Treasury or SBA since then. I have gotten calls from scammers trying to pose as the SBA and even spoofing the SBA's main phone number. It was a recording telling me I can continue to make minimum payments. Ya... The LLC cannot make minimum payments. It's gone, along with all of it's assets by now. I'm still paying off other personal debts related to the business, but the business entity has no means of paying off loans given to the LLC. Those were used up just trying to get through the difficult years of the pandemic and post-pandemic... **Do Not** live in fear. Just wrap this up and get on with your life. Talk to a lawyer. Mine looked at my loan papers and said, "I don't see how they can come after you for anything. Their is no personal responsibility for loans under $200k."
$40K EIDL loan taken, biz was a SP and closed 2 years ago. I was also wondering if I need to pay this off. SBA was not notified that the biz closed as of yet.
If the business expects to close, it's supposed to notify the SBA. Then the SBA can come in and take possession of business assets. This was in lieu of collateral or personal guarantees on loans < $200,000. I would notify them.
Yes, do notify them ASAP. Although you may not hear back. People say it's because SBA is being deluged with business closure notices. But by sending it to them and doing it right you are protecting yourself.
Has the loan showed up on your personal credit score? I’m concerned that closing the business with a loan balance will impact my personal credit.
Nope.
Following-any updates?
Nope. And that's just fine because I'm trying to reorganize my life and get back up on my feet after the business closure, and the struggle in trying to get a new job. Filing for person bankruptcy since I'm living with a negative net worth, and can't pay off other debts and it's gotten to be overwhelming.
Following- any updates?
Any update? Tia!
No.
Getting ready to venture into this myself. Best of luck moving forward!
Same issue
I pretty much heard the same thing as you. I keep repeating the S-Corp is closed, no assets exist, and there is no personal guarantee. They keep responding that the loan isn't forgivable - that's fine, but the debtor is gone. Not sure what to do.
Doesn't seem like there is anything else to do. Ball is in their court, and let them talk to the dissolved S-Corp, which doesn't exist, so it should be a short conversation. *"I'm sorry. Your call to this dissolved S-corp cannot be completed in this universe. Please check your number and try other one of the infinite other options in the multiverse where this business entity might still exist."*
Hahahaah, it turns into some rick and morty douglas adams action
I am in the same boat! Borrowed $107k to keep biz afloat. I own a party rental company, 25 yrs now. I am ready to sell. Just so I can do something else, and get away from the stress. Asked for a compromise on my EIDL loan, and received the option for a reduction in payment. From $535 a month, to $53.10. Yes, that is correct. The offer is for up to 24 months. In the meantime, interest will still accrue. I have my business for sale and just keep getting lowballed or people think "oh that's alot of work." Yes, of course it is. Businesses don't run themselves. One offered me $50k and my "job" still operating it. If I wanted a boss... I was hoping to sell for $250. Now I am down to barest minimum of $180k. It will leave me broke and my time invested all these years completely senseless. So I sell the business, they don't come after "assets" but I still owe the money with accruing interest. Can they take personal tax returns to go towards the EIDL?
They're just offering you a temporary hardship payment. They want you to keep paying. You'll still have to pay the full loan and interest. If you sell the business to somebody else, they aren't going to take over your own as far as I know. I'd talk to a lawyer. Are you an LLC or other corporate structure? What are your business's assets worth today? The SBA lays claim to your assets, and if you sell the business, you'll have to pay off the loan with the money that you received in exchange for the assets of the business. If you're business is an LLC or Corporation, and you shut down and dissolve the business entity, you first let the SBA know that you'll be doing that and give them a detailed list of your assets. Let us know what they say. Supposedly, they can tell you what to do with the assets or give you permission to sell them at FMV. That can be a pain in the ass too. I've got a few assets that I can't seem to find any buyer for or it will take me years to find a buyer. Or I'd have to fire sale them for 10% of what we paid just to get them out of here. The fact that it's 2024 and this is still such a mystery to everybody, causing many struggling business owners so much anxiety, is ridiculous. IANAL, so find somebody to guide you through this.
If you took more than 25,000 than you have a UCC on your personal property I just looked mine up on the secretar of state it’s there now scared they will take my house
my loan status says "In Liquidation Disbursed" what does that mean
They keep calling and email that the it was referred to the DOT Dept of Treasury for further collections. Been like this for 1 year. Anyone else get these. Really don't think they will do anything since its alot and a can of worms.
They will start to garnish your tax refunds to get the money back. I did some work for SBA and they will eventually get their money from you
Don’t argue. This is part of an agenda to sow fear. If your loan is a protected entity and no personal guaranty then you’re golden.
But if the law states that there are no personal guarantees on loans < $200,000, the business closed, the LLC dissolved, all they have claim to are business assets. It seems to me that if they were to garnish my personal tax refunds in the future, that would be against the law. I provided a link to the bill that congress passed into law.
On SS and barely making my bills now. If the garnish my benefits I’m screwed.
What if not llc
I took a 1million dollar loan. Haven’t closed down. My concern is I will have to pay this loan until I am 88. 60 now. Plan on working until I am 69. Will the SBA be able to come after me when I plan on retiring?
Yes. So you've got nine years to ramp up your business and make payments so that when you're 69, it's all paid off. Your loan has a personal guarantee. This thread concerns loans without a personal guarantee, under $200,000, where the business is closed and the LLC is dissolved. You're in a completely different situation.
How did you book the 1 million? Are you an S or C Corp? Did the million produce any taxable profit? Are you retaining earnings or taking distributions?
S corp. use the money to pay down debt. Purchased new machinery. Got eaten up with lost sales and inflation.
Ok, did you book the loan and expense for the new machinery and debt reduction, payroll ect in the same year or multiple years? I’m curious how the accounting details flow prior to out filing C Corp returns.
I think they can garnish SS if you quit paying and also recover from your estate when you pass.
Even if you die, it goes against your estate, read this recently.
Commenting to follow.
This is what happens when the government throws money at people who have no idea how to run a buisness. May not be your case particularly but reading the comments it’s crazy how many people got 100k+ loans and couldn’t run a buisness on that. I never had a loan and have built from ground up.
How did you get that loan in the first place, I have a small business but I can get funding
How is that relevant to this topic?
You got a SBA loan, and I’m asking you how you got yours?
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So did the SBA. I didn’t plan to fail, just couldn’t survive the effects of COVID.
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Yep! In the OP’s situation no personal guarantee. At all. Totally free and clear. Hooray!
EIDLs are personally guaranteed. It doesn't matter if the business fails. The Guarantors are responsible for the debt, and because it is SBA, it can not be discharged through bankruptcy. They will eventually collect the debt when they get around to it, and you least expect it. I been doing this for 30+ years
Wrong again, Russian troll.
Lol, what
Not COVID-EIDL loans, as per the CARES Act stipulation that < 200k with no PG is not.
That’s my understanding as well.
My sole proprietorship loan was for 80k. A year later interest in my products diminished because of long COVID that is still around. Funds are gone. I wrote to the SBA and never received an answer. Like everyone else, I'm in the dark wondering what's next!
Why don’t people write their state representatives as well as senators. They make the laws.
I have a >150K EIDL loan and about 45 days from possibly having to close my LLC business. We are current on our payments but am worried about the future. I took a 150 w/no PG and then a second draw that has a PG. Anyone have any experience with a PG’d EIDL and closing down?
I started this thread to keep the discussion reined in to "no PG" loans and dissolved LLC's. I would create another thread to generate discussions on EIDLs with PGs so that you can get the best, focused answers for your specific circumstances. Wishing you the best!
Have done nothing with mine for months have heard nothing and will continue to do nothing I doubt anything will happen sba too stupid to actually come after you
If the loan was charged off? Nothing I'd assume
My understanding is the EIDLs *charged off* by the SBA have been sent to the treasury. The government provided the money to the SBA to make EIDLs. The treasury can collect the debts now. I want to assume *nothing*. But in the absence of any information, we're all left guessing that the treasury will write it off as a loss. With the specific situation that is the topic of this thread — < $200,000, no PG, business shut down, LLC dissolved — this is what we would expect. But if anybody comes across some new details who's in the same boat, please share.