If you Owe more than $30,000 contact us for a case evaluation at (833) 428-0937
contact us for a free case evaluation at (833) 428-0937
Call us (833) 428-0937

Understanding the SBA Disaster Loan Forgiveness Program

Explore the SBA Disaster Loan Forgiveness Program to aid your business after a natural disaster. Discover eligibility, application steps, and potential benefits in recovery.

Schedule a Consultation

Have You Considered the SBA Disaster Loan Forgiveness Program?

Natural disasters can disrupt not only your business but also your community, leaving financial recovery a daunting challenge. Protect Law Group, a law firm specializing in SBA loan issues, offers guidance on navigating the Small Business Administration (SBA) Disaster Loan Forgiveness Program. This program could provide critical relief for businesses in federally declared disaster zones. Let’s explore how it works and how Protect Law Group can assist you during these challenging times.

What is the SBA Disaster Loan Forgiveness Program?

The SBA Disaster Loan Forgiveness Program is designed to help small businesses recover from natural disasters such as hurricanes, floods, or wildfires. Businesses in disaster zones may receive loans to aid recovery, but repayment can be difficult. The forgiveness program offers partial or complete relief from repayment, evaluated on a case-by-case basis.

How Does It Work?

When your business is in a federally declared disaster area, the SBA assesses the disaster's impact on your operations and finances. If the damage significantly impairs your ability to repay the loan, the SBA may forgive part or all of the debt. Protect Law Group can assist in preparing your case for loan forgiveness, ensuring all necessary documentation is provided.

Are You Eligible?

Eligibility depends on several factors, including your business's location in a declared disaster zone and the impact on your financial health. Protect Law Group’s experienced attorneys can evaluate your situation and guide you through the eligibility requirements, ensuring your application aligns with SBA standards.

Loan Forgiveness vs. Loan Deferment

It’s important to distinguish between loan forgiveness and deferment. Forgiveness eliminates part or all of your loan, while deferment temporarily pauses repayments. Protect Law Group can help you determine which option best suits your financial situation.

Why Seek Forgiveness?

Loan forgiveness can reduce financial strain, allowing you to focus on rebuilding your business. Protect Law Group provides tailored solutions to help you navigate the forgiveness process and alleviate the burden of debt.

The Application Process

Applying for loan forgiveness involves several steps. Protect Law Group offers expert guidance to ensure your application is thorough and accurate.

Step 1: Document Your Losses

Comprehensive documentation of the disaster’s impact is essential. Protect Law Group can assist in organizing financial records and evidence of losses.

Step 2: Complete the Application

Accurate and detailed responses are critical. Protect Law Group’s attorneys can help you complete the application, ensuring all information is correct and complete.

Step 3: Submit and Await Evaluation

Once submitted, the SBA reviews your application. Protect Law Group can provide support during this process, addressing any requests for additional information.

Step 4: Understand the Decision

The SBA will inform you of their decision. Protect Law Group can help you interpret the outcome and explore further options if necessary.

Overcoming Challenges

Ensuring Accurate Documentation

Incomplete documentation can hinder your application. Protect Law Group’s expertise ensures your records are comprehensive and accurate.

Navigating the Process

The application process can be complex. Protect Law Group’s legal professionals provide valuable insights and support, simplifying the process for you.

FAQs About SBA Disaster Loan Forgiveness

Can Future SBA Access Be Affected?

Applying for forgiveness typically does not impact future SBA program eligibility. Protect Law Group can clarify any concerns you may have.

What If Your Application Is Denied?

If denied, Protect Law Group can help you address shortcomings, appeal the decision, or explore alternative solutions.

Can Personal Guarantees Be Released?

Loan forgiveness may allow for the release of personal guarantees. Protect Law Group can review your loan terms and advise on your rights.

What Impact Does Forgiveness Have on Credit?

Loan forgiveness generally does not affect your credit score. Protect Law Group ensures your financial records reflect transparency and compliance.

Legal Assistance and Long-term Recovery

Protect Law Group specializes in SBA loan issues, offering personalized support to businesses seeking loan forgiveness. Their attorneys can guide you through the process, enhancing your chances of success.

Building Resilience

  • Diversification: Expand your offerings and revenue streams.
  • Emergency Funds: Establish savings for future disasters.
  • Insurance: Regularly update your coverage to mitigate risks.

Community Support

Engage with local networks and associations for resources and mentorship. Protect Law Group can connect you with additional recovery initiatives.

Conclusion

The SBA Disaster Loan Forgiveness Program offers vital relief for businesses recovering from natural disasters. With Protect Law Group’s expertise, you can navigate the process effectively and focus on rebuilding your business. Contact Protect Law Group at (833) 428-0937 for a case evaluation and personalized assistance.

Take Control of Your SBA Disaster Loan Challenges

Are you struggling to navigate the complexities of the SBA Disaster Loan Forgiveness Program? Protect Law Group is here to help. With a team of experienced SBA attorneys and Federal Agency Practitioners, we specialize in providing tailored solutions for businesses impacted by natural disasters. Let us guide you through the application process, ensuring your case is presented effectively. Contact us today at (833) 428-0937 for a case evaluation and take the first step toward financial relief and recovery.

Frequently Asked Questions

What is the SBA Disaster Loan Forgiveness Program?

The SBA Disaster Loan Forgiveness Program is a government initiative designed to help small businesses recover from natural disasters. It provides partial or complete relief from repayment of SBA disaster loans for businesses located in federally declared disaster zones, based on the extent of the disaster's impact and the business's financial condition.

How does the SBA Disaster Loan Forgiveness Program work?

When a business is in a federally declared disaster area, the SBA evaluates the disaster's impact on the business's operations and financial health. If the SBA determines that the business is significantly impaired and unable to repay the loan, it may forgive part or all of the debt. This decision is made on a case-by-case basis.

Who is eligible for SBA Disaster Loan Forgiveness?

Eligibility depends on several factors, including being located in a recently declared disaster zone and having an existing SBA disaster relief loan. The business must demonstrate that the disaster has severely impacted its financial and operational ability to repay the loan, despite efforts to recover.

What is the difference between loan forgiveness and loan deferment?

Loan forgiveness means that part or all of the loan is permanently canceled, and repayment is no longer required. Loan deferment, on the other hand, temporarily pauses repayments, giving the business time to improve its financial situation before resuming payments.

What steps are involved in applying for SBA Disaster Loan Forgiveness?

The process involves documenting the disaster's impact on your business, completing the SBA application forms with accurate information, submitting the application for review, and awaiting the SBA's decision. The SBA may request additional information during the evaluation process.

What should you do if your loan forgiveness application is denied?

If your application is denied, review the SBA's reasoning, address any shortcomings, and consider appealing the decision. You can also explore alternative financial assistance or refinancing options to help manage your financial challenges.

$150,000 SBA 7A LOAN - NEGOTIATED STRUCTURED WORKOUT AGREEMENT

$150,000 SBA 7A LOAN - NEGOTIATED STRUCTURED WORKOUT AGREEMENT

Client personally guaranteed SBA 7(a) loan for $150,000. COVID-19 caused the business to fail, and the loan went into default with a balance of $133,000. Client initially hired a non-attorney consultant to negotiate an OIC. The SBA summarily rejected the ineligible OIC and the debt was referred to Treasury’sBureau of Fiscal Service for enforced collection in the debt amount of $195,000. We were hired to intervene and initiated discovery for SBA and Fiscal Service records. We were able to recall the case from Fiscal Service back to the SBA. We then negotiated a structured workout with favorable terms that saves the client approximately $198,000 over the agreed-upon workout term by waiving contractual and statutory administrative fees, collection costs, penalties, and interest.

$324,000 SBA 7A LOAN - SBA OHA LITIGATION

$324,000 SBA 7A LOAN - SBA OHA LITIGATION

Clients obtained an SBA 7(a) loan for $324,000 to buy a small business and its facility. The business and real estate had an appraisal value of $318,000 at the time of purchase.  The business ultimately failed but the participating lender abandoned the business equipment and real estate collateral even though it had valid security liens. As a result, the lender recouped nearly nothing from the pledged collateral, leaving the business owners liable for the deficiency balance. The SBA paid the lender the 7(a) guaranty money and was assigned ownership of the debt, including the right to collect. However, the clients never received the SBA Official 60-Day Notice and were denied the opportunity to negotiate an Offer in Compromise (OIC) or a Workout directly with the SBA before being transferred to Treasury's Bureau of Fiscal Service, which added an additional $80,000 in collection fees. Treasury garnished and offset the clients' wages, federal salary and social security benefits. When the clients tried to negotiate with Treasury by themselves, they were offered an unaffordable repayment plan which would have caused severe financial hardship. Clients subsequently hired the Firm to litigate an Appeals Petition before the SBA Office & Hearings Appeals (OHA) challenging the legal enforceability and amount of the debt. The Firm successfully negotiated a term OIC that was approved by the SBA Office of General Counsel, saving the clients approximately $205,000.

‍

$150,000 SBA 7A LOAN – NEGOTIATED WORKOUT AGREEMENT

$150,000 SBA 7A LOAN – NEGOTIATED WORKOUT AGREEMENT

Client’s small business obtained an SBA 7(a) loan for $150,000.  He and his wife signed personal guarantees and pledged their home as collateral. The SBA loan went into default, the term or maturity date was accelerated and demand for payment of the entire amount claimed was made.  The SBA lender’s note gave it the right to adjust the default interest rate from 7.25% to 18% per annum. The business filed for Chapter 11 bankruptcy but was dismissed after 3 years due to its inability to continue with payments under the plan. Clients wanted to file for Chapter 7 bankruptcy, which would have been a mistake as their home had significant equity to repay the SBA loan balance in full as the Trustee would likely seize and sell the home to repay the secured and unsecured creditors. However, the SBA lender opted to pursue the SBA 7(a) Guaranty and subsequently assigned the loan and the right to enforce collection to the SBA. Clients then received the SBA Official 60-Day Notice and hired the Firm to respond to it and negotiate on their behalf. Clients disputed the SBA’s alleged balance of $148,000, as several payments made to the SBA lender during the Chapter 11 reorganization were not accounted for. To challenge the SBA’s claimed debt balance, the Firm Attorneys initiated expedited discovery to obtain government records. SBA records disclosed the true amount owed was about $97,000. Moreover, because the Clients’ home had significant equity, they were not eligible for an Offer in Compromise or an immediate Release of Lien for Consideration, despite being incorrectly advised by non-attorney consulting companies that they were. Instead, our Firm Attorneys recommended a Workout of $97,000 spread over a lengthy term and a waiver of the applicable interest rate making the monthly payment affordable. After back and forth negotiations, SBA approved the Workout proposal, thereby saving the home from imminent foreclosure and reducing the Clients' liability by nearly $81,000 in incorrect principal balance, accrued interest, and statutory collection fees.

‍

Read more Case Results
Providing real solutions to individuals who are facing SBA loan problems. Contact one of our experienced SBA Attorneys and Federal Agency Practitioners today for a Case Evaluation - (833) 428-0937.
©2021 Protect Law Group, All Rights Reserved.Design by T. Walker Consulting, Inc.