Demystifying SBA Lien Release: What Borrowers Need to Know
Are you currently dealing with an SBA Lien? Our team at Protect Law Group is here to keep you informed to help you take back control of your assets. Learn more today!
A loan guaranteed by the Small Business Administration can open a lot of doors for a business. They could use the funds to purchase real estate, equipment or even to finance their debts. Unfortunately, because this economy is still not completely back on track following the recent recession, it's quite possible a company will run into problems paying their SBA loan. Although it might be possible for a business owner to negotiate a settlement after they receive an SBA demand letter, it could be much easier to manage with the help of an attorney.
SBA loan default is a serious matter and each case is as different as every business that uses this loan program. Default could result in SBA loan foreclosure or seizure of business or even personal tax refunds through the Tax Offset Program. Neither of these options are going to be very appealing to a business owner who is struggling to keep their company afloat. The first step a business owner should take when they are faced with this situation is to find an attorney who has enough experience in this area to analyze each case individually and devise a solution that could benefit the business owner and the SBA.
Any business owner who has defaulted on an SBA loan can send an SBA Offer in Compromise to attempt to settle the debt. The SBA carefully evaluates each request for this type of loan forgiveness and if there are any errors, omissions or misrepresentations, the application is likely to be denied and the business owner will have to find another way to resolve the debt. Instead of going through this process alone, an entrepreneur might have a much better chance of success if they work with an attorney who has a proven track record.
This is not something business owners need to handle alone. Getting professional help is essential to having a favorable outcome in this complicated debt situation. Once an entrepreneur knows what they want to get out of the process, they should contact an attorney to give them the best chance of getting something close to that result.
Millions of Dollars in SBA Debts Resolved via Offer in Compromise and Negotiated Repayment Agreements without our Clients filing for Bankruptcy or Facing Home Foreclosure
Millions of Dollars in Treasury Debts Defended Against via AWG Hearings, Treasury Offset Program Resolution, Cross-servicing Disputes, Private Collection Agency Representation, Compromise Offers and Negotiated Repayment Agreements
Our Attorneys are Authorized by the Agency Practice Act to Represent Federal Debtors Nationwide before the SBA, The SBA Office of Hearings and Appeals, the Treasury Department, and the Bureau of Fiscal Service.
The client personally guaranteed an SBA 7(a) loan for $150,000. His business revenue decreased significantly causing default and an accelerated balance of $143,000. The client received the SBA's Official 60-day notice with the debt scheduled for referral to the Treasury’s Bureau of Fiscal Service for aggressive collection in less than 26 days. We were hired to represent him, respond to the SBA's Official 60-day notice, and prevent enforced collection by the Treasury and the Department of Justice. We successfully negotiated a structured workout with an extended maturity date that included a reduction of the 14% interest rate and removal of substantial collection fees (30% of the loan balance), effectively saving the client over $242,000.
Clients obtained an SBA 7(a) loan for their small business in the amount of $298,000. They pledged their primary residence and personal guarantees as direct collateral for the loan. The business failed, the lender was paid the 7(a) guaranty money and the debt was assigned to the SBA. Clients received the Official 60-Day Notice giving them a couple of options to resolve the debt balance directly with the SBA before referral to Treasury's Bureau of Fiscal Service. The risk of referral to Treasury would add nearly $95,000 to the SBA principal loan balance. With the default interest rate at 7.5%, the amount of money to pay toward interest was projected at $198,600. Clients hired the Firm with only 4 days left to respond to the 60-Day due process notice. Because the clients were not eligible for an Offer in Compromise (OIC) due to the significant equity in their home and the SBA lien encumbering it, the Firm Attorneys proposed a Structured Workout to resolve the SBA debt. After back and forth negotiations, the SBA Loan Specialist assigned to the case approved the Workout terms which prevented potential foreclosure of their home, but also saved the clients approximately $294,000 over the agreed-upon Workout term with a waiver of all contractual and statutory administrative fees, collection costs, penalties, and interest.
Client personally guaranteed SBA 7(a) loan balance of $58,000. The client received a notice of Intent to initiate Administrative Wage Garnishment (AWG) Proceedings. We represented the client at the hearing and successfully defeated the AWG Order based on several legal and equitable grounds.
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