This questionnaire captures the full picture SmallBiz Recon needs to prepare your dispute or recall package — your facts, in your own words. The first section is education, then your responses. You review everything before it goes anywhere.
Section 01
The Path a COVID EIDL Follows
A COVID EIDL moves through stages. Knowing the stages explains where a loan sits and which office, the SBA or the U.S. Treasury, is responsible for it at each point.
Payments begin after the deferment period. The first payment is generally due 30 months from the disbursement date shown on the Original Note.
Before a defaulted loan is referred to the Treasury, the SBA generally issues a written demand for payment, commonly described as a 60-day notice. It is the borrower's pre-referral opportunity to resolve the account with the SBA.
Under SBA policy, severely delinquent loans are generally placed in liquidation or charged off around 90 to 110 days past due. Charge-off is an internal accounting step; the balance is still owed.
A referral to the Treasury Offset Program generally follows once a loan is about 120 days delinquent. Through TOP, federal payments such as tax refunds and certain benefits can be reduced to recover the debt.
After charge-off, loans are generally referred to the Treasury's Cross-Servicing program unless barred by a valid legal defense such as compromise or bankruptcy. In Cross-Servicing, the Treasury, often through a private collection agency, manages collection.
Who decides what: the SBA owns the servicing decision on its loans. The Treasury collects on the SBA's behalf after referral. The Treasury and any collection agency carry out collection, but they do not grant SBA servicing relief.
A recall is when the SBA pulls a referred debt back from the Treasury so the SBA can service it again. Under the Treasury's cross-servicing procedures, a referred debt cannot simply be cancelled, but it can be recalled by the creditor agency, which moves responsibility for servicing, collecting, or compromising the debt back to the SBA. It is the avenue through which a borrower can ask the SBA to reconsider an account that has already been referred for collection.
The Treasury Financial Manual lists specific situations where the creditor agency must recall a transferred debt, including where the debt is not valid or not enforceable, or where the agency discovers it incorrectly certified the debt. Before any transfer, the agency is also required to make written demand and provide all required due process (subsection 5030.40b). Where a borrower believes a debt was transferred without those requirements being met, the borrower can raise that and request that the SBA review and, where appropriate, recall the debt.
In general terms, a recall request is where a borrower explains their situation to the SBA, may put a good-faith payment forward, and shows an ability to resume and maintain regular payments going forward despite past difficulty. A recall is discretionary as to those good-faith situations, the SBA chooses whether to grant it, and a request is generally considered stronger when it is specific, factual, and supported by documents.
Recalls do occur. Under a temporary exemption from the standard referral deadline, the SBA recalled roughly 60,000 COVID EIDL loans from the Treasury. That was a large, programmatic recall; even where mass recalls are not occurring, the manual's individual, for-cause recall provisions remain in place. None of this means any particular request will be granted.
A dispute is a written statement that something about the debt, or the way it was referred, is incorrect. Common examples are the balance or payoff amount, whether a payment was credited, whether the required notice was sent, or whether the debt is valid at all. A dispute is filed with the office that currently holds the debt.
A borrower has the right to dispute the transfer of a debt to the Treasury, or the amount of the debt, if the borrower does not believe it is correct. The cross-servicing procedures are set out in the Treasury Financial Manual, Volume I, Part 3, Chapter 5000, and the underlying right is grounded in federal law (31 U.S.C. 3716 and 31 C.F.R. 285.12). When a debtor disputes the validity or enforceability of a debt, the Treasury's manual provides that the dispute may be sent back to the creditor agency for resolution (subsection 5035.40).
For a COVID EIDL, one common basis relates to the pre-referral requirements. Because the creditor agency must make written demand and provide all required due process before a debt is referred (subsection 5030.40b), a dispute can ask the SBA and the Treasury to review whether the account was referred consistent with those requirements.
A dispute does not erase a valid debt. It places the borrower's position on the record and asks the right office to review and correct errors. The Treasury and a collection agency will route a dispute, but they do not grant SBA servicing relief; for servicing relief, the file generally needs to return to the SBA. For debts it holds, the Treasury provides a formal Cross-Servicing dispute process.
Relief & Reinstatement Options
The SBA has offered different relief options at different times. Knowing which is current and which is historical helps avoid confusion.
Eligible COVID EIDL borrowers may reduce their payments by 50 percent for six months, available once every five years, requested through the SBA Loan Portal. Interest continues to accrue during the reduced-payment period, and full payments resume when the period ends.
For a loan that has been charged off but not yet referred to the Treasury, the SBA's published process is to pay the full overdue balance through the SBA Loan Portal, then request reinstatement to current status with the COVID EIDL servicing center.
A prior program that temporarily reduced payments. The SBA ended HAP on March 19, 2025. It is included here only because many borrowers participated in it before it closed.
Escalation Options
When a request is not moving, there is a recognized order of channels for raising it. In general, the ladder is used from the bottom up, one step at a time, with each contact kept polite, factual, and documented. Escalation is about getting a file in front of the right person.
What it is: Politely checking on a request that has already been submitted, by phone, email, or letter.
When it is used: Files stall. A timely follow-up keeps a matter active and builds a record of continued engagement.
The basis: A borrower is always entitled to ask about the status of their own file.
What it is: An independent SBA office that takes comments from small businesses about unfair or excessive federal regulatory enforcement and compliance conduct, including by agencies other than the SBA, such as the Treasury. This can include how a federal agency or its collection contractor is pursuing a debt.
When it is used: Generally used when a borrower believes a federal agency's enforcement or collection conduct has been unfair or excessive, or cannot get a fair review through normal channels. It is focused on enforcement fairness, not routine servicing questions.
The basis: Congress created the National Ombudsman through the Small Business Regulatory Enforcement Fairness Act of 1996 to give small businesses a confidential way to comment on federal enforcement conduct, and the office refers those comments to the agency for a high-level fairness review.
What it is: Asking a local U.S. Representative's office to make an inquiry to the SBA or Treasury on a constituent's behalf.
When it is used: Agencies often respond faster to a congressional inquiry. Caseworkers in a Representative's office handle these regularly.
The basis: As a constituent, a person may ask their member of Congress for help with a federal agency. This is a standard service, not a special favor.
What it is: The same kind of inquiry, made through one of a person's two U.S. Senators.
When it is used: A second congressional channel, used for added weight or if a House inquiry stalls.
The basis: Every person has two U.S. Senators whose offices provide the same constituent casework help.
What it is: Writing to the White House as a final, top-level contact.
When it is used: Generally used only after the other channels are exhausted, to raise visibility at the highest level.
The basis: Any citizen may write to the White House. Realistically, such contacts are almost always referred back to the agency that handles the loan. They raise visibility, they do not override the SBA's decision.
What it is: A formal request to have a specific decision or collection action reviewed, where a review path exists. The clearest example in the collection context is the right to a hearing before the Treasury garnishes wages.
When it is used: Used when a borrower wants to formally challenge a specific decision or collection action, rather than only ask for reconsideration.
The basis: Some collection actions carry a defined right of review. A borrower generally has the right to request a hearing before administrative wage garnishment (31 C.F.R. 285.11) and may challenge administrative offset. The SBA Office of Hearings and Appeals has general jurisdiction over SBA debt-collection matters, but for an EIDL collected through the Treasury's cross-servicing program, the wage-garnishment hearing is generally handled through that program's own process rather than OHA. Not every servicing decision carries a formal appeal, so the available path depends on the specific decision.