What is the agreement on assumption of debt?

A debt assumption involves two simultaneous transactions; the first transaction cancels the original debtor's obligation, and the second transaction creates a new debt contract between the creditor and the new debtor, or assumer.

Eidl Loan Assumption With Purchase Agreement In San Jose

Category:

Small Business - Loans and Lending

State:

Multi-State

City:

San Jose

Control #:

US-00193

Format:

Instant download

Description

The EIDL Loan Assumption with Purchase Agreement in San Jose is a formal agreement that allows a buyer (Assumptor) to assume the loan obligations of the seller (Borrower) related to an Economic Injury Disaster Loan (EIDL) obtained through the Small Business Administration (SBA). This document outlines the responsibilities and agreements between all parties, including the Borrower, Assumptor, and SBA, to ensure that the Assumptor assumes all obligations and liabilities under the original loan terms. Key features include consent from the SBA for the assumption, specified terms of loan transfer, and maintenance of the original loan conditions. Filling out the form requires clear identification of parties involved and precise financial details of the loan. This form is particularly useful for attorneys, partners, owners, associates, paralegals, and legal assistants navigating real estate transactions, as it helps maintain compliance with SBA regulations while facilitating the transfer of loan obligations. The clear structure of the document safeguards all parties’ interests and restricts unauthorized modifications or transfers without prior consent from the SBA.

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FAQ

As of January 2025, there are no plans to forgive outstanding SBA EIDL loans.

The purpose of an assumption agreement is to ensure the seller is freed from their obligations, while the buyer agrees to take on these obligations. Legally, the seller could still be held liable if they don't have a proper assumption agreement in place that absolves them of those responsibilities.

As of January 2025, there are no plans to forgive outstanding SBA EIDL loans.

A debt assumption involves two simultaneous transactions; the first transaction cancels the original debtor's obligation, and the second transaction creates a new debt contract between the creditor and the new debtor, or assumer.

As of January 2025, there are no plans to forgive outstanding SBA EIDL loans.

There is no provision for forgiveness on these loans, nor should anyone expect that there will be. The EIDL is a decades-old program, and if they forgive loans for this particular disaster, then borrowers for every other EIDL program are going to expect forgiveness on their loans as well. It's not happening.