Q: Am I personally liable for an EIDL loan of $130k taken out by my S Corp if I close the business?

A: This is actually an evolving area of the law. If you have no guarantee, the answer should be no. But, the SBA has been investigating whether proceeds were properly used. If you took the money for improper purposes, the US Attorney could come after you. But, there are so many of these loans, it is hard to see that happening in every case.

A: If your business closes next week, you're personally liable for the debt. EIDLs are not forgivable. You'll repay them over the 30-year term, though you can pay your loan off early with no prepayment penalties. Also, for future reference, a Sub-Chapter S corp is your worst nightmare and your accountant's best friend. When you need legal services or advice, contact an attorney.

A: In New Jersey, as with other states, the structure of an S Corporation typically provides a degree of separation between the business's debts and your personal assets. This means that in many cases, shareholders are not personally liable for the debts of the corporation.

Since you mentioned that there was no personal guarantee on the EIDL loan, normally, your personal assets should not be at risk for this loan if your S Corp cannot pay it back. The liability for the loan would typically remain with the corporation. However, this is contingent upon the specific terms of the loan and the absence of any personal guarantees.

If the business closes and the assets of the S Corp are insufficient to cover the EIDL loan, the SBA's ability to collect may be limited to what was put up as collateral, in this case, the inventory or other business assets.

Regarding the $30k bank loan, the liability would depend on the terms of that loan and whether or not you provided a personal guarantee. If there was a personal guarantee, you might be personally liable for that debt.

It's important to review all loan documents and understand your obligations. The terms of the loans and the nature of the liabilities can vary based on the contracts you signed.

If you are considering closing your business, consulting with an attorney experienced in corporate and bankruptcy law is advisable. They can help you navigate the closure process, understand your liabilities, and protect your rights.

Remember, each situation is unique, and professional advice tailored to your specific circumstances is crucial in complex financial and legal matters like this.