If you can't pay your COVID-19 EIDL loan, your first move is to ask the SBA for hardship payment assistance before you hit 90 days past due. It lets eligible borrowers cut their payment by 50% for six months, and you request it through the SBA Loan Portal. If you stop paying, your account can be referred to the Treasury once it's 120 days delinquent, and at that point the SBA can no longer help. Acting early keeps the most options open.
This guide uses what the SBA publishes on sba.gov (reviewed October 2026) to explain what happens if you stop paying, who qualifies for assistance, how to request it step by step, what to do if you're already far behind or closing, and how to fix the cash flow so you don't fall behind again.
Key takeaways
- The SBA lets eligible COVID EIDL borrowers cut their payment 50% for six months, once every five years.
- To qualify, your loan must be less than 90 days past due and your business must still be operating.
- At 120 days delinquent, your account can be referred to the Treasury Offset Program.
- Once your loan moves to Treasury Cross-Servicing, the SBA can no longer help you.
- Interest keeps accruing during the assistance period, so your final payment gets bigger.
- Don't take on more expensive debt to cover the EIDL; outside financing only makes sense as a bridge for operations.
What happens if you stop paying your EIDL
A COVID-19 EIDL is a federal loan, and the law requires the SBA to collect delinquent debt through government channels. According to sba.gov, this is the path if you don't pay:
- Past due: while your loan is current or less than 90 days past due, you can still request payment assistance.
- Treasury Offset Program (TOP): if you don't pay under the assistance plan or your normal schedule, your account can be sent to TOP once it reaches 120 days delinquent. TOP collects overdue debts owed to federal and state agencies and can withhold federal payments due to you, such as your tax refund.
- Treasury Cross-Servicing: loans that meet certain delinquency criteria are transferred to the Treasury. From then on, the SBA no longer services your loan and can't help you; you deal directly with the Treasury.
- Charged-off loans: if your loan has been charged off but hasn't been transferred to the Treasury yet, the SBA says you can reinstate it by paying the full past-due amount in the portal and then requesting reinstatement by email.
EIDL loans above certain amounts were signed with personal guarantees and collateral, so pull out your note and security agreement and check exactly what you signed. If your loan comes from a different SBA program, such as a 7(a), read our guide on defaulting on an SBA loan.
SBA hardship payment assistance: who qualifies
The SBA describes its payment assistance as help for short-term financial hardship. Here are the key points it publishes:
| Item | What the SBA says |
|---|---|
| What it does | Cuts your payment by 50% for six months |
| How often | Once every five years per eligible borrower |
| Where to apply | The SBA Loan Portal |
| Loans approved for more than $200,000 | Until the portal supports them, requests go by email to COVIDEIDLServicing@sba.gov |
| Interest | Not forgiven; it keeps accruing during the six months |
| Afterward | You return to the full payment, and the shortfall shows up as a larger final (balloon) payment |
To qualify, according to sba.gov:
- Your loan must be less than 90 days past due and in current status.
- The business must be open and operating.
- Neither you nor any owner can be in an active bankruptcy.
- You must be requesting it because of a temporary cash-flow hardship, not a long-term problem.
That last condition matters. The assistance is breathing room, not a permanent fix. Use the six months to correct whatever caused the shortfall. You can read the SBA's own description on its COVID-19 relief options page.
How to ask for help, step by step
- Log in to the SBA Loan Portal. Create an account or sign in. That's where you see your loan status, make payments and request servicing actions.
- Confirm where you stand. Check how many days past due you are. If you're getting close to 90, don't wait: request assistance today.
- Write a short explanation. Two or three sentences on what happened (for example, you lost a big client or had a slow season) and why it's temporary. Have your recent bank statements handy.
- Submit the request. Through the portal, or by email to COVIDEIDLServicing@sba.gov if your loan was approved for more than $200,000. In any email to the SBA, put your loan number and the reason in the subject line, and include your loan number, reason, business name, your name and your contact details in the body.
- Keep everything in writing. Screenshots, confirmations and replies. If something goes wrong, that record protects you.
- Use the six months with a plan. Cut costs, collect overdue invoices and build a budget that can carry the full payment when the period ends.
For questions about an existing EIDL, the SBA says to email CESC@sba.gov or send a message through the portal. Be wary of companies that charge to "fix" your EIDL: you can request assistance directly from the SBA at no cost.
If you're far behind, with the Treasury, or closing
Each stage has a different way out:
| Your situation | What to do |
|---|---|
| Less than 90 days past due | Request the 50%, six-month payment assistance in the portal |
| More than 90 days, still with the SBA | Message the SBA through the portal, explain your situation and ask what servicing options you have; get current as soon as you can |
| Charged off, not yet sent to the Treasury | Pay the full past-due amount in the portal, then request reinstatement at COVIDEIDLServicing@sba.gov |
| Already in Treasury Cross-Servicing | The SBA can't help anymore; contact the Treasury directly |
| Closing or liquidating the business | Notify the SBA through the portal or at COVIDEIDLServicing@sba.gov before you close, to get guidance |
If you're closing, don't go silent. Notifying and documenting usually leaves you in a better position than ignoring letters. Before signing any agreement, talk to an accountant or a commercial debt attorney, especially if you signed a personal guarantee.
The SBA also handles servicing actions for changes like relocating the business, changing owners or releasing collateral, and it publishes a requirements letter for each one. If a disaster caused your hardship, our disaster recovery resources for small businesses may help too.
Fix your cash flow so you don't fall behind again
EIDL terms are long, so the problem is rarely the loan itself. It's that money runs short in certain months. What helps most:
- Set the EIDL payment aside as money comes in. Move a slice of every deposit into a sub-account instead of scrambling on the due date.
- Get paid faster. Invoice the same day, ask for deposits on big jobs and accept card or Zelle so you're not waiting on checks.
- Cut what doesn't produce sales. Subscriptions, rented equipment you don't use, inventory that sits on the shelf.
- Plan for your seasons. If your business slows in certain months, save during the strong ones.
- Review your other debts. If you have cash advances or credit cards, know exactly how much you pay each week in total.
For more ideas, see our cash flow management tips for tough times.
What if I need working capital while I recover?
Be careful here. We don't recommend taking on new financing to cover EIDL payments. If the business can't support a cheap, long-term loan, adding a more expensive one only makes the problem worse. The SBA's assistance comes first.
Where short-term financing can make sense is as a working-capital bridge for something that generates sales: stocking inventory for a strong season, covering payroll while you collect on a signed contract, or repairing the equipment you produce with. Merchant Fund Express, our recommended funder, reviews your sales and deposits, not just your credit, with amounts from $5,000 and credit from FICO 500+. Decisions often come in 2 to 4 hours, collateral isn't required in most cases, and Spanish-speaking support is available. If your case fits as a bridge for operations, you can apply with Merchant Fund Express; it's free and doesn't affect your credit.
Before accepting any offer, ask yourself: does this money help me sell more, or does it just move debt from one place to another? If it's the second, talk to the SBA first. Leer en español.
Frequently asked questions
What happens if I don't pay my EIDL loan?
According to the SBA, if you don't pay, your account can be referred to the Treasury Offset Program once it's 120 days delinquent, which can withhold federal payments like your tax refund. Loans that meet certain criteria move to Treasury Cross-Servicing, and then the SBA can no longer help. That's why you should request assistance before 90 days.
Can the SBA lower my EIDL payment?
Yes, if you qualify. The SBA lets eligible COVID-19 EIDL borrowers reduce their payment by 50% for six months, once every five years. Your loan must be less than 90 days past due, the business must be open and the hardship must be temporary. Interest keeps accruing during that time.
Can I get an EIDL payment plan if I'm already behind?
If you're less than 90 days past due and in current status, you can request payment assistance in the SBA Loan Portal. If you're past that point, message the SBA through the portal or email CESC@sba.gov with your loan number and explain your situation. If your loan is already with the Treasury, you have to deal with the Treasury directly.
Is my EIDL forgiven if I close my business?
The SBA doesn't present closing as automatic forgiveness. What it says is that if you expect to close or liquidate, you should message it through the portal or email COVIDEIDLServicing@sba.gov for guidance. If you signed a personal guarantee, talk to an attorney or accountant before you close.
Does it cost anything to request EIDL hardship assistance?
Requesting it directly from the SBA is free; you do it through the loan portal. Be wary of companies that charge to process it or promise to erase your debt. If you want help reviewing your plan, the SBA has Resource Partners that can work with you; ask your district office.
Should I take out another loan to catch up on my EIDL?
Generally, no. If the business can't cover a cheap, long-term loan, adding more expensive debt usually makes things worse. Request the SBA's assistance first and adjust your cash flow. Short-term financing only makes sense as a working-capital bridge for something that brings in sales.