Business Owners Who Neglect Their EIDL Loans Are In For A Rude Awakening!
Oct 25, 2023Business Banking Newsletter: Get notified when new articles like this one get published by subscribing to the Business Banking Newsletter using the following LinkedIn link: https://www.linkedin.com/newsletters/7026323952511700992/.
The SBA revealed that it had charged off $220M worth of EIDL loans even before the 1st payment was ever made on any of them! It then announced that by March of 2023 approximately $62 billion worth of the total $380 billion of EIDL loans were delinquent! The number of delinquencies continues to grow! The SBA is overwhelmed with the process of trying to collect the outstanding loans and is increasingly throwing in the towel!
If you are a Business Banker, you are also likely to feel the pain! Just because the SBA charged off an EIDL loan, it does not mean that the business owner is in the clear. All delinquencies, defaults, and charge offs on federally-backed programs are reported to CAIVRS. If a business owner neglected his or her EIDL loans, there will be a positive hit on CAIVRS. What does this mean? If the business owner is applying for any type of SBA loan, a positive hit on CAIVRS will bring the application to a screeching halt and it can take months to get the issue resolved. Yes, this means that escrow will not close, the new business will not be acquired, the new equipment will not be delivered, and the business expansion will have to be put on hold!
About the only thing you can do as a Business Banker to alleviate the pain is to ask upfront if the business owner was ever been delinquent or defaulted on their EIDL loan. Depending on how bad the situation is, there is a chance it could get resolved…but it will take a while for that to happen! Or it could be a flat out decline by the SBA. Either way, it is better to find out sooner rather than later so that you don’t waste precious time and resources pursuing deals that are not going to go anywhere!
Enroll in my Business Banker Success Development Program and learn how to get your business banking game from where it is to where you desire it to be! There is no CDC BDO in the market that can make the same offer! Let’s talk if you want to start fueling your success in Business Banking today!
If you want to work with a CDC BDO that will help get you’re your SBA deals to the finish and give you the tools you need to succeed, call Victor Castillo at 310-210-4571. You can learn about the business banker development program at www.bizpetrol.com/business-bankers.
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