Paul O’Reilly, a Shareholder in Shulman Rogers’ Real Estate Department, recently contributed to an article in the Washington Business Journal discussing the SBA’s billion-dollar EIDL collateral issue, urging bankrupt companies to assist in resolving the problem.
In his commentary, Paul highlights the significant challenges the SBA faces with the EIDL program, pointing out that the agency was not designed to handle the complexities of these loans. He notes that the SBA lacks the internal mechanisms necessary to manage collateral effectively, but he identifies potential solutions to address the issue.
Among his suggestions, Paul proposes the establishment of an internal division within the SBA dedicated to working with borrowers before they reach bankruptcy—a strategy commonly employed by banks. He also advocates for more flexible approaches, such as waiving interest or extending loan terms, which could enable borrowers to repay some of their debt instead of none.
Paul further emphasizes that sending loans to the Treasury Department for collections only adds unnecessary fees, complicating the situation for all parties involved. He believes that if legislative action is required, the SBA should be actively working toward those changes.
Read the full article in the Washington Business Journal.
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