EIDL Payment Plans and Hardship Options

Standard EIDL Repayment Terms

EIDL loans carry a 30-year repayment term at 3.75% interest (2.75% for nonprofits). Monthly payments are calculated based on the loan amount and these terms. For many borrowers who received EIDL loans during the pandemic, the initial deferment period has ended and regular payments are now due.

Hardship Accommodation Plans

The SBA created Hardship Accommodation Plans to provide temporary relief for borrowers who could not afford their standard monthly payments. Under a HAP, the borrower makes reduced payments for a set period, typically six months to a year. The difference between the HAP payment and the standard payment accrues and must eventually be addressed.

The HAP Expiration Problem

When a HAP expires, the borrower must resume full payments. But the arrearage that accumulated during the HAP period creates a compounded problem. Borrowers who made every reduced payment on time may still find themselves classified as delinquent because the HAP payments were less than the full amount due. This is a critical issue because the SBA’s own hardship program can become the mechanism that generates the delinquency leading to Treasury referral.

The Detrimental Reliance Argument

Borrowers who participated in HAPs in good faith have a strong argument that the SBA cannot use its own hardship program as the basis for a delinquency referral without providing a cure opportunity. Under the Federal Claims Collection Standards, agencies are generally required to offer borrowers a repayment arrangement before pursuing involuntary collection. If the SBA failed to offer a new arrangement after HAP default, this procedural failure can support a defense against collection.