Navigating SBA Loan Programs
Are you interested in learning more about the various types of SBA Loan Programs? Protect Law Group is here to keep you informed. Learn more today!
When a business is no longer sustainable and has debts it cannot fulfill, it may need help closing down as it cannot simply shut down and ignore the debts. If the business owner obtained an SBA loan for their business, they may receive an SBA demand letter asking for the amount paid in full. If the business owner cannot pay in full in a reasonable amount of time, they may want to look into an Offer in Compromise.
There are only certain circumstances in which an SBA Offer in Compromise will work. If the borrower is unable to make the full payment and the business has ceased with all assets liquidated, it might be possible for them to work out an Offer in Compromise with the SBA. However, this is not as simple as the remaining debt is forgiven and there are no other repercussions. It's always recommended for the business owner to speak with a tax advisor or a legal advisor before beginning something like this as it might not be the right path for them to take.
When a business owner is facing an SBA loan default or an SBA loan foreclosure, speaking with a lawyer can help them determine what all of their options are. If there are enough assets to pay off at least most of the business debts, they might be able to pay off the remainder over time and not be able to go through the Offer in Compromise. The lawyer will closely look at the business assets, debts, and other finances to see what the right steps to take will be for that particular business. The lawyer may also be able to look into other help for the business owner, like a Tax Offset Program, to help them fulfill all of the debts and finish closing the business properly.
Choosing to do an Offer in Compromise depends on quite a few factors surrounding the business's current financial situation and can be a good idea for some businesses. A business owner will want to speak with a lawyer to find out if it's the right step for their business or if there's an option that might be better for them. If you're closing a business and not sure how to handle your debts or are worried about an Offer in Compromise, contact a lawyer today for help.
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.
Clients executed several trust deeds pledging seven (7) real estate properties and unconditional personal guarantees for an SBA 7(a) loan from the participating lender. The clients' small business failed and eventually defaulted on repayment of the loan exposing all collateral pledged by the clients. The SBA subsequently acquired the loan balance from the lender, including the right to liquidate and collect all pledged collateral pursuant to the trust deed instruments.
The Firm was hired to negotiate separate release of lien proposals for all 7 real estate properties. In preparation for the work assignment, the Firm Attorneys initiated discovery to secure records from the SBA and Treasury's Bureau of Fiscal Service. After reviewing the records and understanding the interplay between the lender and the SBA, the attorneys then prepared, submitted and negotiated the release of lien (ROL) for each of the 7 real estate properties for consideration.
After submitting the proposals, the assigned SBA Loan Specialists approved each ROL package - significantly reducing the total SBA debt claimed.
Small business and guarantors obtained an SBA COVID-EIDL loan for $1,000,000. Clients defaulted causing SBA to charge-off the loan, accelerate the balance and refer the debt to Treasury's Bureau of Fiscal Service for collection. Treasury added nearly $500,000 in collection fees totaling $1,500,000. Clients were served with the SBA's Official 60-Day Notice and exercised the Repayment option by applying for the SBA’s Hardship Accommodation Plan. However, their application was summarily rejected by the SBA without providing any meaningful reasons. Clients hired the Firm to represent them against the SBA, Treasury and a Private Collection Agency. After securing government records through discovery, we filed an Appeals Petition with the SBA Office of Hearings & Appeals (OHA) court challenging the SBA's referral of the debt to Treasury. During litigation and before the OHA court issued a final Decision and Order, the Firm successfully negotiated a reinstatement and recall of the loan back to the SBA, a modification of the original repayment terms, termination of Treasury's enforced collection and removal of the statutory collection fees.
Clients' 7(a) loan was referred to Treasury's Bureau of Fiscal Service for enforced collection in 2015. They not only personally guaranteed the loan, but also pledged their primary residence as additional collateral. One of the clients filed for Chapter 7 bankruptcy thinking that it would discharge the SBA 7(a) lien encumbering their home. They later discovered that they were mistakenly advised. The Firm was subsequently hired to review their case and defend against a series of collection actions. Eventually, we were able to negotiate a structured workout for $180,000 directly with the SBA, saving them approximately $250,000 (by reducing the default interest rate and removing Treasury's substantial collection fees) and from possible foreclosure.
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