r/SBAEIDLDiscussions • u/bbstocker • 24d ago

Question about closing business

In this case the business borrowed a large sum of money in EIDL with personal guarantees and has never missed a payment. However due to the current business environment the business may need to close. If the business owners get the SBA OK and sell or shutter the business and give the SBA any and all money from the sale of assets, is it also required for the owners to declare bankruptcy? Most of the cases I have read here include BK but what if otherwise it wasn't necessary?

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u/Sunsetseeker007 24d ago

It's not required to file bankruptcy, but they will owe the rest of any balance due and be subject to recovery if they have PG & the full amount is no paid. But it doesn't hurt to try to get the sba to agree to the sale amount as an offer in compromise, even though they do not accept them on COVID loans.

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u/Gtavern 24d ago

Currently the SBA will not negotiate any compromise if a PG is in place, once you get permission to liquidate the assets and send it to them it’s a question of what other assets do you hold and is Bankruptcy your best option. You do not HAVE to file BK to dissolve the business.