EIDL demand letter and the Treasury referral
COVID EIDL loans did not disappear. The SBA hardship plan ended March 2025 — act before the Treasury referral.
Education only. Not legal advice, not a determination of your rights, and not a recommendation to take any action. Facts, contracts, deadlines, and current law can change the outcome. For your situation, talk to a qualified professional.
What changed in 2025
The SBA’s COVID EIDL hardship accommodation plan ended in March 2025. Borrowers who fell behind may now receive a demand letter. A demand letter usually opens a 60-day window before the loan is referred to the U.S. Treasury for collection.
Why the Treasury referral matters
Once a federal debt reaches Treasury, it has powerful tools: administrative wage garnishment up to 15% of your wages without a court order, and offsets of tax refunds and certain payments. Act in the 60-day window to avoid escalation.
Your options
- Contact SBA servicing to ask about payment plans or other help.
- Talk to a free SBDC advisor about your business and personal exposure.
- If you cannot pay, understand the consequences before ignoring the letter.
- Do not give your SSN or bank numbers to anyone who calls you — verify in writing.
Education, not a recommendation
This page explains the process only. Whether to pay, settle, or seek other relief is a decision for you with qualified professional help. Contact the SBA and a free SBDC advisor directly.
Official sources
- U.S. Small Business Administration
- SBA — Report a loan servicing issue
- Treasury Fiscal Service — Debt Collection
- America’s SBDC (free advisors)
- CalOSBA
Last reviewed 2026-10-12. Sentinel Answer · San Jose, California.