Understanding the SBA Hardship Accommodation Plan
During the COVID-19 pandemic, the federal government created new programs and expanded some already in existence to help people recover from economic loss they suffered. Small business owners were a big focus of these efforts, with two very popular loan programs being offered to them.
One was the very popular Paycheck Protection Program (PPP), which offered loans that could be converted into forgivable grants if the borrower used the funds for certain purposes and could prove they did so.
The other was the Economic Injury Disaster Loan (EIDL) program, which, while already in existence, was expanded considerably. Unlike the PPP program, these loans had to be repaid in full.
Borrowers who were having trouble repaying the loans did at one point have the opportunity to take advantage of the Hardship Accommodation Plan (HAP), though that is no longer available.
Below, we’ll discuss the HAP in more depth and what options borrowers have if they can’t repay their EIDL loan.
Introduction to Economic Injury Disaster Loans
The EIDL program is offered through the Small Business Administration (SBA). While it was available prior to the pandemic, it got expanded considerably during it.
The expansion was done to essentially declare the entire country in a disaster zone, which by default made all businesses eligible to apply from a location perspective. That’s because in order to be eligible for an EIDL loan, the business had to be in a declared disaster zone, and suffered substantial economic injury as a result of that disaster.
The loan program is meant to help nonprofit organizations, small agricultural cooperatives and small businesses receive financial support if they suffered substantial economic injury due to the pandemic.
These loans provided a vital lifeline to small business owners who were affected by the COVID-19 pandemic, offering them long repayment terms and low interest rates.
The SBA integrated various other programs to help borrowers manage their EIDL loan debt, including the HAP.
Eligibility and Application
To be eligible to receive assistance under HAP, borrowers had to have an existing EIDL loan and be experiencing temporary financial hardship still. What the plan did was allow borrowers to either defer payments or make reduced payments for a specific temporary period, which was meant to help them manage their debt while they were still trying to recover.
Business owners who were interested in applying to the HAP could either apply online through the SBA’s portal or contact the COVID EIDL Servicing Center directly.
The SBA made approval decisions on a case-by-case basis, after borrowers provided documentation that proved they were still experiencing financial hardship.
COVID-19 EIDL Program Overview
During the COVID-19 pandemic, the EIDL program was expanded considerably to try to help small businesses that were struggling. In addition to the low-interest loans with long repayment periods, the program also offered other forms of assistance including some grants.
When the program was expanded, the SBA provided guidance on all the details of the program, including typical repayment terms, application procedures and eligibility criteria, among other things.
All of this information was available directly from an SBA center, the SBA’s website or one of the agency’s Resource Partners.
Managing Economic Injury Disaster Loan Debt
Even with the added financial support, many small business owners still had trouble recovering from the economic damage the pandemic caused. Part of those challenges was managing this newfound EIDL loan debt, especially as they were trying to adjust business operations or account for lower-than-expected revenues.
The SBA did offer many resources for borrowers in this situation, including mentoring and counseling about managing debt.
As mentioned, the HAP was also available to many borrowers while the pandemic was still going on, to help provide them more temporary financial relief. However, that program expired in early 2025, meaning borrowers had to look elsewhere for relief.
Some borrowers may still have other options including debt settlement, loan modifications and repayment plans, but there isn’t a one-size-fits-all solution to the issue.
That’s why it’s essential for small business owners to understand the full terms of their EIDL loans — including personal guarantees, repayment terms and interest rates — so they can know what they’re responsible for, what would happen if they default and what options might be available to them.
EIDL Assistance Options
While the HAP program is no longer available, the SBA still provides guidance and support for small business owners who are struggling to repay their EIDL loan. Many of the agency’s Resource Partners can provide mentoring and financial counseling.
The SBA also has an online portal that provides an easy and convenient way to manage EIDL loans, make payments and request various servicing actions. The COVID EIDL Servicing Center is also available for any borrowers who would like more direct assistance.
COVID EIDL Repayment and Forgiveness
The PPP was extremely popular because borrowers had the opportunity to convert the money they borrowed into a forgivable grant, as long as they used the proceeds for specific operational expenses. Unfortunately, this is not the case for EIDL loans.
These loans had to be repaid in full, including all related fees and interest rates. Borrowers who are having trouble repaying should investigate their options so they can avoid defaulting on the loan or having the loan charged-off.
Conclusion and Next Steps for COVID-19 Economic Injury Disaster Relief
The SBA’s Hardship Accommodation Plan was a great program that provided EIDL loan borrowers with a way to receive temporary financial relief if they were having trouble repaying their loan. Unfortunately, that program is no longer available, as it expired in early 2025.
Small business owners who are still having trouble repaying their EIDL loan should contact the SBA or loan servicer to find out whether they have any options to receive financial relief. This could include changing repayment terms or modifying the loan in a way that provides relief.
You may also want to consult with an experienced bankruptcy attorney if you have exhausted all of your options. The expert attorneys at Babi Legal Group have more than 150 years of experience in bankruptcy, business, debt settlement and debt collection law, and can provide you with the guidance you need to manage your EIDL loan debt if you are having trouble repaying.
For more information, contact us today.
