They Took Small Business Loans During Covid. Now The Government Is Coming To Collect

When COVID-19 hit, the two 30-something owners of a small New Jersey manufacturing company thought their business might sink. So they grabbed a lifeline thrown by Congress and the Small Business Administration: a pair of Economic Injury Disaster Loans that totaled roughly $400,000, repayable over 30 years, with a fixed 3.75% interest rate and a requirement that both owners personally guarantee the loan.

“Our options were kind of take the loans or shut the doors,” recalls one partner, who asked to be identified only as Nole. Their company went on an automatic repayment plan, which lasted for 17 months after an initial deferment period, Nole recalls. But when the debits stopped in mid-2024, neither noticed, Nole says, since the payments had only amounted to about 2% of their monthly bills, or about $2,000 per month.

As Nole tells it, the first he heard there was a problem was this past March, when he received a letter at his home from Coast Professional, a collection agency hired by the U.S. Treasury, demanding immediate payment of $547,000, including back interest and a 30% delinquency penalty of $110,000. “I didn’t sleep for a week when I got the notice. It was like, ‘How do I tell my wife?’” he recalls.

Read the full story on Forbes: https://www.forbes.com/sites/johnschroyer/2026/11/01/they-took-small-business-loans-during-covid-now-the-government-is-coming-to-collect/

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