SBA To Refer PPP and COVID-19 EIDL Borrowers to U.S. Treasury Department and the IRS for Collection

Financial Management

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The U.S. Small Business Administration (SBA) has begun referring defaulted Paycheck Protection Program (PPP) and COVID-19 Economic Injury Disaster Loan (EIDL) borrowers to the U.S. Treasury Department and the Internal Revenue Service for collection.

What does this mean?

Borrowers referred to the U.S. Treasury and IRS for collection may face significant consequences, including:

  • Negative impact on credit scores.
  • Withholding of future state and federal tax refunds and any potential federal government funding (such as social security).
  • Referral of loans to private debt collectors to pursue repayment, who may use tactics like wage garnishment.

PPP Loans

  • Loan forgiveness is still available for most PPP borrowers.
  • If individuals have a PPP loan under $100,000, they may be able to apply for loan forgiveness now at the SBA PPP Direct Forgiveness Portal.
  • For more information, visit
  • A step-by-step guide to using the portal can be found here.


  • Many COVID-19 EIDL loans are eligible for a Hardship Accommodation Plan (HAP). For more information regarding COVID-19 EIDL loans or available relief options, visit Manage your EIDL at today. Borrowers in Treasury Offset can still apply if they are not in Treasury Cross-Servicing.
  • If borrowers have a COVID-19 EIDL loan and need to establish a repayment plan or make a payment, they can access their loan through the MySBA Portal. For loans over $200,000, borrowers should contact the COVID EIDL Servicing Center directly at to discuss hardship assistance.

SBA is here to help

  • PPP: If borrowers need additional assistance with their PPP direct forgiveness application, they can contact SBA at 877-552-2692 (Monday-Friday, 8 a.m.-8 p.m. EDT).
  • COVID-19 EIDL: If borrowers need assistance with their COVID-19 EIDL loan, they can contact SBA at 833-853-5638 (Monday-Saturday, 8 a.m.-8 p.m. EDT), or email with their loan or application number and the reason for their request in the subject line.

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