SBA Loans In and Out of Bankruptcy

Over the past several years, untold numbers of small businesses have incurred excessive amounts of SBA loans, first EIDL disaster loans at the onset of the pandemic (usually about $150K) that were then increased almost with no underwriting to up to $2M. Many of those businesses have collapsed now. In bankruptcy, the US Trustee is reviewing cases for fraud in some circumstances (for misuse of the SBA loan proceeds). Under what circumstances are the businesses (and their owners) at risk? Outside of BK, there are options for hardship repayment plans and/or offers in compromise. The SBA took numerous 2nd blanket liens on all assets -- and those need to be addressed. In some cases, borrowers can negotiate asset sales or the release of liens with the SBA. This program would review all facets of these cases which impact 99% of small businesses now.