It's all a matter of what's in the loan contract. I'd look to see if there are provisions for 1) a personal guarantee and 2) collateral. If your in laws signed up for a loan with no personal guarantee and no collateral, that was a high risk move and they might have to charge it off.
I'd approach the owner and offer to suspend payments for six months. If needed, step in to help her apply for the federal assistance program to keep the business afloat. Put everything in writing and have her sign the modification.
If she refuses to work with your in laws, send a letter noting that they offered to help, but since she refused the modification, the original terms still stand. Note that failure to pay will cause the note to go into collections, and if there's a personal guarantee, destroying her personal credit. Then see if you can sell the note to a collections agency, but honestly if there's no personal guarantee then I'm not sure you will be able to sell the note for much.
COVID-19 has created a tough situation for lenders and borrowers. Obviously lenders need to understand that businesses took out loans and now, through no fault of their own, aren't able to make payments. But there are going to be people who take advantage of the situation maliciously or use it to excuse the fact they're bad at business.
