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SBA Ends Hardship Accommodation Program – What You Can Do Next

Discover how to navigate the end of the SBA's Hardship Accommodation Program and explore new support options available for small businesses facing temporary cash flow challenges.

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What Happens When a Crucial Financial Support Program Ends?

For many beneficiaries of the Small Business Administration's (SBA) Hardship Accommodation Program (HAP), this question became a reality when the program officially ended on March 19, 2025. Small business owners now face the challenge of navigating their financial obligations without this support. If you are among them, understanding the context and exploring your options is essential.

Understanding the End of the Hardship Accommodation Program

The SBA's Hardship Accommodation Program provided critical relief to businesses struggling with the financial impact of the COVID-19 pandemic. By offering deferred payment plans for Economic Injury Disaster Loans (EIDLs), the program served as a financial cushion during uncertain times. With its conclusion, the SBA has shifted its focus to new strategies for business recovery.

Why the Program Ended

The termination of HAP aligns with the SBA's transition to a post-COVID financial strategy. The agency aims to encourage business recovery and growth rather than prolonged deferment of financial obligations. This shift reflects the SBA's belief that the economic environment now supports recovery under revised support systems.

The SBA’s New Offering: Short-Term Payment Assistance

In place of HAP, the SBA has introduced "Short-Term Payment Assistance," a program designed to help businesses facing temporary financial difficulties. This initiative requires businesses to demonstrate the short-term nature of their challenges and provide evidence of long-term viability.

What is Short-Term Payment Assistance?

Unlike HAP, this program involves an application process where businesses must prove:

  1. Their cash flow issues are temporary.
  2. The specific event causing the financial shortfall.
  3. How and when the issue will likely be resolved.

This targeted approach ensures that only businesses with temporary, rectifiable setbacks are eligible for assistance.

Eligibility Criteria for Short-Term Payment Assistance

Determining your eligibility for this program is crucial. Below are the specific criteria outlined by the SBA:

Basic Eligibility Requirements

  1. No Previous Enrollment in HAP: Businesses that participated in HAP at any payment level are not eligible.
  2. Loan Payments: Your loan must be less than 120 days past due.
  3. Charge-Off Status: Loans in charge-off status must be reinstated before applying, provided they have not been sent to the Treasury.
  4. Detailed Financial Explanation: Applicants must provide a comprehensive report, including:
    • Evidence of the temporary nature of the cash flow disruption.
    • A description of the events causing financial difficulties.
    • A projected timeline and resolution plan.

Specific Circumstances for Eligibility

The SBA has clarified that circumstances like a permanent COVID-induced downturn will not qualify. However, temporary issues, such as payment delays due to technological transitions with major clients, may be considered if supported by evidence.

What You Could Gain From Approval

One-Time Financial Relief

Approved applicants may receive a one-time, six-month payment reduction at 50% of their usual monthly payment. This single opportunity underscores the SBA's focus on providing immediate but measured relief for temporary issues.

Steps if You Are in Charge-Off Status

Businesses with loans in charge-off status may still have options, provided the loan has not been forwarded to the Treasury. Here’s how to proceed:

Path to Reinstate Your Loan

  1. Access the SBA EIDL Portal: Log in to manage your loan status.
  2. Submit a Payment: Pay the overdue balance to bring your loan current.
  3. Request Reinstatement via Email: Contact the SBA to update your loan status to "current."

Once reinstated, you may be eligible to apply for Short-Term Payment Assistance.

How to Get in Touch with the SBA

Maintaining communication with the SBA is vital. Here are the contact methods:

Method Details EmailCOVIDEIDLServicing@sba.govPhone 833-853-5638 PortalSBA EIDL Servicing Portal

Final Considerations

The end of the Hardship Accommodation Program marks a significant shift in SBA support strategies. While the new Short-Term Payment Assistance program offers opportunities, it comes with stricter conditions:

  1. No Guarantee of Approval: Applications must present a compelling case for temporary financial issues.
  2. One-Time Opportunity: This program provides a single chance to address a specific challenge.

Businesses must carefully evaluate their options and prepare strong applications to navigate this transition effectively. For personalized assistance, consider reaching out to Protect Law Group, a law firm specializing in SBA loan issues, at (833) 428-0937.

Navigate the End of SBA’s Hardship Accommodation Program with Confidence

The conclusion of the SBA's Hardship Accommodation Program has left many small business owners searching for answers. If you're feeling uncertain about your next steps, Protect Law Group is here to help. Our experienced SBA attorneys and Federal Agency Practitioners specialize in guiding businesses through complex SBA loan challenges, including navigating the new Short-Term Payment Assistance program. Contact us today at (833) 428-0937 for a case evaluation and tailored solutions to secure your business's financial future. Don't face these changes alone—let us provide the expertise and support you need to move forward confidently.

Frequently Asked Questions

What is the SBA Hardship Accommodation Program (HAP), and why did it end?

The SBA Hardship Accommodation Program (HAP) was a financial support initiative that allowed businesses to defer payments on their Economic Injury Disaster Loans (EIDLs) during the COVID-19 pandemic. It ended on March 19, 2025, as part of the SBA's transition to a post-COVID financial strategy. The SBA is now focusing on programs that encourage business recovery and growth rather than prolonged deferment of financial obligations.

What is the SBA's new Short-Term Payment Assistance program?

The Short-Term Payment Assistance program is a new initiative introduced by the SBA to help businesses facing temporary financial difficulties or cash flow challenges. Unlike HAP, this program requires businesses to demonstrate that their financial issues are temporary, provide evidence of the cause, and outline a plan for resolution. It is a more targeted approach to financial relief.

Who is eligible for the Short-Term Payment Assistance program?

To qualify for the Short-Term Payment Assistance program, businesses must meet the following criteria: - They must not have previously enrolled in the Hardship Accommodation Program. - Their loan payments must be less than 120 days past due. - Their loan must not be in charge-off status or sent to the Treasury. - They must provide a detailed explanation of their financial situation, including evidence of the temporary nature of the issue, the cause, and a resolution plan.

What benefits does the Short-Term Payment Assistance program offer?

If approved, businesses can receive a one-time, six-month payment reduction at 50% of their usual monthly payment. This is a single opportunity designed to address temporary financial challenges, unlike the multi-tiered support offered by HAP.

What should businesses in charge-off status do to regain eligibility?

Businesses with loans in charge-off status can take the following steps to regain eligibility: 1. Log in to the SBA EIDL portal to manage their loan status. 2. Submit a payment to bring the loan current. 3. Request reinstatement via email to the SBA, asking for the loan status to be updated to "current." Once reinstated, they may apply for the Short-Term Payment Assistance program.

How can businesses contact the SBA for assistance or questions?

Businesses can contact the SBA through the following methods: - Email: COVIDEIDLServicing@sba.gov - Phone: 833-853-5638 - Portal: SBA EIDL Servicing Portal Maintaining communication with the SBA is essential for navigating loan status changes and understanding eligibility requirements.

$150,000 SBA 7A LOAN - SBA OIC CASH SETTLEMENT

$150,000 SBA 7A LOAN - SBA OIC CASH SETTLEMENT

Client personally guaranteed SBA 7(a) loan balance of over $150,000.  Business failed and eventually shut down.  SBA then pursued client for the balance.  We intervened and was able to present an SBA OIC that was accepted for $30,000.

$324,000 SBA 7A LOAN - SBA OHA LITIGATION

$324,000 SBA 7A LOAN - SBA OHA LITIGATION

Clients obtained an SBA 7(a) loan for $324,000 to buy a small business and its facility. The business and real estate had an appraisal value of $318,000 at the time of purchase.  The business ultimately failed but the participating lender abandoned the business equipment and real estate collateral even though it had valid security liens. As a result, the lender recouped nearly nothing from the pledged collateral, leaving the business owners liable for the deficiency balance. The SBA paid the lender the 7(a) guaranty money and was assigned ownership of the debt, including the right to collect. However, the clients never received the SBA Official 60-Day Notice and were denied the opportunity to negotiate an Offer in Compromise (OIC) or a Workout directly with the SBA before being transferred to Treasury's Bureau of Fiscal Service, which added an additional $80,000 in collection fees. Treasury garnished and offset the clients' wages, federal salary and social security benefits. When the clients tried to negotiate with Treasury by themselves, they were offered an unaffordable repayment plan which would have caused severe financial hardship. Clients subsequently hired the Firm to litigate an Appeals Petition before the SBA Office & Hearings Appeals (OHA) challenging the legal enforceability and amount of the debt. The Firm successfully negotiated a term OIC that was approved by the SBA Office of General Counsel, saving the clients approximately $205,000.

$310,000 SBA 7A LOAN - SBA OIC TERM WORKOUT

$310,000 SBA 7A LOAN - SBA OIC TERM WORKOUT

Client personally guaranteed an SBA 7(a) loan for $100,000 from the lender. The SBA loan went into early default in 2006 less than 12 months from disbursement. The SBA paid the 7(a) guaranty monies to the lender and subsequently acquired the deficiency balance of about $96,000, including the right to collect against the guarantor. However, the SBA sent the Official 60-Day Due Process Notice to the Client's defunct business address instead of his personal residence, which he never received. As a result, the debt was transferred to Treasury's Bureau of Fiscal Service where substantial collection fees were assessed, including accrued interest per the promissory note. Treasury eventually referred the debt to a Private Collection Agency (PCA) - Pioneer Credit Recovery, Inc. Pioneer sent a demand letter claiming a debt balance of almost $310,000 - a shocking 223% increase from the original loan amount assigned to the SBA. Client's social security disability benefits were seized through the Treasury Offset Program (TOP). Client hired the Firm to represent him as the debt continued to snowball despite seizure of his social security benefits and federal tax refunds as the involuntary payments were first applied to Treasury's collection fees, then to accrued interest with minimal allocation to the SBA principal balance.

We initially submitted a Cross-Servicing Dispute (CSD) challenging the referral of the debt to Treasury based on the defective notice sent to the defunct business address. Despite overwhelming evidence proving a violation of the Client's Due Process rights, the SBA still rejected the CSD. As a result, an Appeals Petition was filed with the SBA Office of Hearings & Appeals (OHA) Court challenging the SBA decision and its certification the debt was legally enforceable in the amount claimed. After several months of litigation before the SBA OHA Court, our Firm Attorney successfully negotiated an Offer in Compromise (OIC) Term Workout with the SBA Supervising Trial Attorney for $82,000 spread over a term of 74 months at a significantly reduced interest rate saving the Client an estimated $241,000 in Treasury collection fees, accrued interest (contract interest rate and Current Value of Funds Rate (CVFR)), and the PCA contingency fee.

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