The loans in question actually did have very strict collateral clauses - basically if the borrower defaults the lender can take possession of assets that basica

The loans in question actually did have very strict collateral clauses - basically if the borrower defaults the lender can take possession of assets that basically put the borrower out of business. There are three possible explanations for why I think the businesses in question are doing this: 1.) The lenders in question are philanthropic organizations, and would take a PR hit if there's a protacted court battle that puts the borrower out of businesses. They may be betting that the lenders won't enforce their contracts (turning out to be a poor bet in retrospect, but many businesses see philanthropic capital as dumb money). 2.) The court systems are closed. It's going to be many months, possibly years, before they can actually take possession of the capital. 3.) The business may not believe that they'll be in business in the long term. If by not paying back a loan, you end up out of business in a year, but by paying it back you end up out of business in 3 months, you actually do have a fiduciary duty to not pay it back.