If You Received a Denial for an SBA EIDL Loan Based Solely On Your Credit, Keep Reading.

April 26, 2020

We are starting to hear of U.S. Small Business owners who received a denial notice for an Economic Impact Disaster Loan ("EIDL") by the SBA without any additional contact from SBA.  The reason for denial is based solely on credit history. Many of these businesses did not receive any emergency grant funds either.  

These denials are coming with the ability to apply for reconsideration.

A number of legal issues exist with this. The CARES Act provides SBA an avenue to APPROVE an EIDL based solely on credit report; however, it does not allow for a denial based on the same and suggests other evidence should be reviewed by SBA to determine ability to repay such a loan.

Additionally, the Emergency Grant funds should never have been based on your credit report or the success of the EIDL application. The law expressly states the emergency grant funds do not have to be repaid "even if" later denied for the EIDL.

SBA delayed disbursing these Grant funds well beyond the 3-day disbursement window proscribed by statute, and then is denying loans, so as to not ever have to answer for acting contrary to law.

If you are a sole proprietor (with or without employees), an independent contractor, or other small business that is eligible for these funds, please consider the following steps:

  1. In order for lawyers to determine how we can best advocate for small businesses, we need data to better understand who is affected by these missteps. If you applied for the EIDL and Emergency Grant, please consider taking 2 minutes to complete this form: Click Here.
  2. Before you apply for reconsideration, contact us to help you through the process. We are offering significantly reduced fees to assist in this process.
  3. If you have not received Emergency Grant Funds OR a denial letter on your EIDL, Contact Us for help navigating this as well.