Other countries eased pandemic debt. American small businesses still face up to 30 years of SBA EIDL payments.
Op-Ed By Mitch Goldstone, CEO of ScanMyPhotos.com
I keep wondering how many small businesses that survived COVID will end up closing because of the loans they took out to stay open.
The federal government disbursed approximately $385 billion through its COVID Economic Injury Disaster Loan (EIDL) program. Some borrowers now face accumulating interest, federal debt collection, and repayment terms extending up to 30 years — far longer than the emergency itself. Few businesses remain in operation for even ten years, let alone three decades, yet the debt persists. Unlike a mortgage, which may leave the borrower with an asset once it is paid off, the EIDL loan structure offers no residual asset value to the few businesses that remain operational and repay these pandemic-era loans in full. Drive down Main Street in your town. How many mom-and-pop businesses have been there for 30 years?
I addressed this issue in The Hill in January. Since then, I have examined more closely how other countries responded to the same crisis. I am concerned that the United States may have left some small businesses burdened with emergency debt long after the crisis had passed.
The Shutdowns Ended. The Interest Didn’t.
When COVID-19 emerged, customers disappeared, and revenue declined sharply. Business owners still faced payroll obligations, rent, and other bills. The SBA offered emergency loans to businesses at an interest rate of 3.75%, with repayment terms of up to 30 years. The objective was to provide immediate liquidity, with loans approved in about two days and loan packages that few banks would consider. Payments were initially deferred and eventually postponed for 30 months, while interest continued to accrue. As a result, borrowers could owe more when repayment began than the amount they had originally received.
Consider the extensive fine print, terms of service, and legal agreements many people don’t read before clicking “I Agree.” Now imagine your business was failing during the COVID-19 pandemic. It may have felt like being thrown from a sinking ship, prompting you to grasp at anything that could keep you afloat. For many small business owners, that meant obtaining an SBA EIDL loan. Who was considering 30 years of debt while struggling to survive the next 30 days?
The government has offered different forms of temporary payment assistance, but reduced payments don’t stop interest from growing. In September 2025, Treasury began doing something very bad. They transfered delinquent COVID EIDL loans for federal debt collection.
In February, Andy Medici of The Business Journals reported on the growing number of people facing federal collection efforts, including small-business owners struggling with pandemic-related debt. How many of these businesses are still operating, and how many have closed? How much money is the Treasury recovering, and what are the costs of collection? I urge the new Congress and Senate, following the midterms, to investigate these questions before more businesses become subject to collection efforts.
Other Countries Didn’t All Choose 30 Years of Debt
In my earlier ScanMyPhotos.com article comparing international pandemic relief, I found some striking differences in how governments helped businesses survive. Why Other Nations Got Pandemic Relief Right, SBA EIDL Didn’t.
- Canada created the Canada Emergency Business Account, providing roughly C$49 billion to nearly 900,000 businesses and nonprofits. The loans were interest-free, with partial forgiveness available to qualifying borrowers who met repayment deadlines. A business receiving C$60,000 could have up to C$20,000 forgiven.
- Britain’s Bounce Back Loan program charged 2.5% interest, with the government covering interest during the first year. Borrowers could extend repayment from six to ten years. Germany provided emergency grants to eligible small businesses. Its KfW rapid-loan program also placed substantial credit risk on the federal government.
- Australia took a different approach. Its JobKeeper program initially paid eligible employers A$1,500 every two weeks for each qualifying worker. Instead of requiring businesses to borrow all the money needed for payroll, the government directly subsidized part of that expense.
- Switzerland offers another revealing comparison. Its smaller government-backed COVID loans initially carried no interest. The remaining loans generally must be repaid by 2028, with extensions to 2030 available in hardship cases.
Now compare those dates with America. Some COVID EIDL borrowers could still be making payments around 2050. The United States also offered forgivable PPP loans, grants, and other pandemic assistance. Those programs mattered. But EIDL was different. It left borrowers with long-term obligations that generally cannot be forgiven under the program’s ordinary terms.
Why shouldn’t Congress compare the results? Did partial forgiveness help more businesses recover? Did wage subsidies protect jobs at a lower cost? Did shorter repayment terms work better? We have years of experience to examine. We should use it. Why can’t Congress give struggling SBA EIDL borrowers the same serious attention?
Washington has found money to rescue Wall Street, automakers, airlines, farmers, and businesses through the CARES Act. It also backed a $20 billion financial arrangement with Argentina. Meanwhile, America’s war with Iran had already cost an estimated $43.6 billion through September 2026, according to U.S. military figures reported by the Associated Press. That doesn’t include every cost of the conflict and long-term obligations.
It Starts with One Voice to Fix This
In 2005, I became a lead plaintiff in the antitrust lawsuit against Visa, Mastercard, and major banks over credit card fees merchants paid. The litigation eventually resulted in a $5.54 billion settlement that benefited millions of merchants. I remember trying to get the word out when companies became eligible to file claims. Many didn’t realize they qualified. Even owners whose businesses had closed could still be eligible. The Associated Press covered my efforts to alert them. That experience showed me how difficult it can be for small businesses to challenge powerful institutions. The legal process took years, but persistence eventually helped give eligible merchants an opportunity to recover money.
The EIDL situation is different. The government still has a responsibility to examine whether the program it created during an extraordinary emergency is producing reasonable results.
November 3 Could Change the Conversation
The midterm elections are less than three weeks away. I believe they offer an opportunity to put this issue before Congress. If Democrats win control of the House, new committee chairs could call SBA officials to testify, examine Treasury’s collection practices, and demand a detailed accounting of outstanding pandemic debt. A change in Senate leadership could create additional opportunities for oversight and to provide loan forgiveness and rebate back all the interest paid. Think of the PPP program as a precedent, where qualifying loans were forgiven.
That would not guarantee relief. President Trump would still have a role in approving legislation, and Senate rules could make major reforms difficult. However, Congress does not need a new president to hold hearings. I would also welcome Republican participation. Small-business debt is not a partisan issue; owners in every state are affected, regardless of how they vote.
The SBA’s inspector general has already identified weaknesses in the agency’s handling of certain delinquent COVID EIDL loans. That alone deserves serious attention.
Congress Should Look at the Math Before More Businesses Close
Lawmakers and the SBA must consider interest relief for borrowers facing genuine hardship, along with settlement options. Congress should also find out how much taxpayers are spending to collect loans that may never be repaid in full. If more businesses close because of this debt, the damage won’t stop with their owners. People could lose their jobs. Landlords could be left with empty storefronts, while suppliers lose customers they’ve relied on for years. Local communities would lose tax revenue, and the government could end up recovering even less of the money it lent. How much more will this cost the country if Congress waits?
Fraud should be prosecuted, and taxpayer funds must be protected. However, we should distinguish between individuals who stole federal funds and business owners who borrowed in good faith to survive a government-declared emergency. Congress should commission an independent comparison of pandemic business assistance programs in the United States and other major economies. The comparison should examine defaults, recoveries, loan forgiveness, taxpayer costs, and business survival to determine which approaches were most effective..
I’ve operated ScanMyPhotos since 1990. I’ve lived through recessions, enormous changes in technology, and the financial uncertainty that comes with running a business. I know how quickly circumstances can change. A business loan normally helps finance something expected to generate future revenue. COVID EIDL was different. Much of that money went toward ordinary expenses during a period when normal business activity had disappeared.
That distinction matters.
No one wants EIDL borrowers to wait two decades, as merchants did during the credit card litigation, for Washington to take their circumstances seriously. The next national emergency will not wait until 2050. Before it occurs, we should assess what worked during the last one. Before November 3, I would like every candidate for Congress to answer one question: What will you do to support the small businesses still struggling with the debt they incurred to survive COVID?
Mitch Goldstone is CEO of ScanMyPhotos.com, founded in Irvine, California, in 1990. He was lead plaintiff in the Visa and Mastercard merchant interchange litigation that resulted in a $5.54 billion settlement.
Revised on October 15, 2026
