Helping a Parent Pay Off an SBA Loan for Their Nonprofit: A Thoughtful Approach
Supporting a parent financially can be a delicate task, especially when it involves a debt accumulated for a noble cause. My father, who retired recently and relies solely on Social Security, faces the challenge of paying off an SBA loan of approximately $24,000. This loan was crucial during the COVID-19 pandemic for a nonprofit that he and my late uncle established years ago to support a school for the deaf abroad, an effort they manage through employing the school’s teachers.
With my uncle’s passing and my father’s wish to conclude the nonprofit’s operations, managing this outstanding loan has become a priority. Until this year, my financial situation didn’t allow me to assist with the loan repayments, but now I have the capacity to cover these monthly obligations while maintaining my mortgage and other financial responsibilities. My mother, who still works and lives with my dad, may have also been contributing towards these payments, but with her nearing retirement, it’s crucial to relieve her of this burden.
Here are my main considerations and questions:
1. Contribution Strategies:
Should I simply make the minimal payments by transferring funds directly to my father, either by check or through an online banking service like Zelle? This approach may provide him with the immediate relief he needs.
2. Loan Responsibility After My Father:
If my father were to pass away before completely paying off the loan, who would be liable for the remaining balance? In the United States, children generally are not responsible for a parent’s debt, but this loan is tied to the nonprofit. Considering my uncle was the only other person involved with the nonprofit before he passed, it’s uncertain who would bear this responsibility.
Navigating these questions is essential to providing my father the support he needs without unintentionally assuming undue burden. I welcome any insights or experiences in similar situations, as well as advice on the best approach to assisting my father in this meaningful yet challenging financial undertaking.
