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SBA Offer in Compromise

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SBA Offer in Compromise Attorneys

If you have recently received the 60-Day Official Notice from the SBA offering you the opportunity to petition for an administrative review of the debt, make an SBA offer in compromise or enter into a repayment agreement for an SBA loan default you may not know which way to turn. Not only has your SBA debt come back to haunt you but if you fail to respond to the 60-Day Official Notice within the stated time frame, your case will be cross-referred to the Department of Treasury’s Bureau of Fiscal Service, where the Government will add an amount up to 30% of the original SBA debt balance as “administrative fees and costs.”

An SBA offer in compromise is an out-of-court settlement option for a small business which probably needs to shut down and there is no reasonable turnaround plan that can be executed to resurrect it from its current financial quandary. Furthermore, this remedial option is best utilized when it is apparent that the small business’s pledged collateral is insufficient to pay off the outstanding SBA loan balance and the personal guarantees of the owners are at stake.

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An SBA offer in compromise (OIC) is not possible without the cooperation of the responsible Borrowers and Guarantors. One of the basic elements of an SBA OIC is that the small business has ceased operations and all business assets have been liquidated. The small business owner’s assistance and help in maximizing the recovery on the business assets can help minimize the amount of deficiency balance on the SBA loan.

The amount offered for settlement must bear a reasonable relationship to the estimated value of the projected amount of recovery available through enforced collection. An SBA OIC is not available when the obligor has the financial ability to pay the deficiency in full within a reasonable time frame. An SBA OIC cannot be accepted if there is any evidence or knowledge of fraud, substantial misrepresentation, or financial dishonesty on the part of the offeror.

Each individual SBA OIC will be based on a case by case review of the Borrower’s or Guarantor’s individual financial situation and certain “litigative risks.” Factors that will be considered are:
• An assessment of the debtor’s ability to pay and potential earnings capacity
• Health and life expectancy
• Local economic conditions
• Equity in pledged or reachable assets
• Settlement arrangements with other creditors
• Applicable exemptions available to debtor under State and Federal law
• The cost, time and risk of collection litigation
If you received the SBA’s 60-Day Official Notice providing you with an opportunity to submit an SBA OIC, don’t do it alone. Hire a qualified SBA Attorney to help your through this difficult and complex process.

Contact us today for a Case Evaluation.

An SBA offer in compromise (OIC) is not possible without the cooperation of the responsible Borrowers and Guarantors. One of the basic elements of an SBA OIC is that the small business has ceased operations and all business assets have been liquidated. The small business owner’s assistance and help in maximizing the recovery on the business assets can help minimize the amount of deficiency balance on the SBA loan.

The amount offered for settlement must bear a reasonable relationship to the estimated value of the projected amount of recovery available through enforced collection. An SBA OIC is not available when the obligor has the financial ability to pay the deficiency in full within a reasonable time frame. An SBA OIC cannot be accepted if there is any evidence or knowledge of fraud, substantial misrepresentation, or financial dishonesty on the part of the offeror.

Each individual SBA OIC will be based on a case by case review of the Borrower’s or Guarantor’s individual financial situation and certain “litigative risks.” Factors that will be considered are:
• An assessment of the debtor’s ability to pay and potential earnings capacity
• Health and life expectancy
• Local economic conditions
• Equity in pledged or reachable assets
• Settlement arrangements with other creditors
• Applicable exemptions available to debtor under State and Federal law
• The cost, time and risk of collection litigation
If you received the SBA’s 60-Day Official Notice providing you with an opportunity to submit an SBA OIC, don’t do it alone. Hire a qualified SBA Attorney to help your through this difficult and complex process.

Contact us today for a Case Evaluation.

SBA Offer in Compromise
$350,000 SBA 7A LOAN - NEGOTIATED STRUCTURED WORKOUT AGREEMENT

$350,000 SBA 7A LOAN - NEGOTIATED STRUCTURED WORKOUT AGREEMENT

Client personally guaranteed SBA 7(a) loan for $350,000. The small business failed but because of the personal guarantee liability, the client continued to pay the monthly principal & interest out-of-pocket draining his savings. Client hired a local attorney but quickly realized that he was not familiar with SBA-backed loans or their standard operating procedures. Our firm was subsequently hired after the client received the SBA's official 60-day notice. After back-and-forth negotiations, we were able to convince the SBA to reinstate the loan, retract the acceleration of the outstanding balance, modify the original terms, and approve a structured workout reducing the interest rate from 7.75% to 0% and extending the maturity date for a longer period to make the monthly payments affordable. In conclusion, not only we were able to help the client avoid litigation and bankruptcy, but we also save him approximately $227,945 over the term of the workout.

$150,000 SBA 7A LOAN - SBA OIC CASH SETTLEMENT

$150,000 SBA 7A LOAN - SBA OIC CASH SETTLEMENT

Client personally guaranteed SBA 7(a) loan balance of over $150,000.  Business failed and eventually shut down.  SBA then pursued client for the balance.  We intervened and was able to present an SBA OIC that was accepted for $30,000.

$750,000 SBA 504 LOAN - NEGOTIATED TERM REPAYMENT AGREEMENT

$750,000 SBA 504 LOAN - NEGOTIATED TERM REPAYMENT AGREEMENT

Clients personally guaranteed SBA 504 loan balance of $750,000.  Clients also pledged the business’s equipment/inventory and their home as additional collateral.  Clients had agreed to a voluntary sale of their home to pay down the balance.  We intervened and rejected the proposed home sale.  Instead, we negotiated an acceptable term repayment agreement and release of lien on the home.

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