SBA Microloans Available Online
If you have questions about any SBA related issues, including the tax offset program, SBA loan foreclosure, or responding to an SBA demand letter, call us.
Small businesses facing mounting debt obligation from an SBA loan may seek a small business reorganization under the new bankruptcy law.
Book a Consultation CallThe rapid deterioration of the American job market (and the world job market) will make it tough on San Diego businesses in the coming months. The new Chapter 11 Subchapter V bankruptcy may provide an easier solution for small businesses. A small business reorganization may save your business.
Employment
No matter how you slice it, the employment picture does not bode well for small businesses. With people out of work, less money will be spent in the economy and at your business. Unfortunately, this will further negatively affect employment. Even with the Payment Protection Program and various deferments, the situation does not look good for small businesses. For many small businesses, an SBA 7a or 504 loan consists of the main debt obligation. Without a small business reorganization, the lender and / or the SBA can attempt to collect.
Like many businesses, your business may be facing a downturn. The options may seem few. Lending programs, like the SBA's Disaster Loan program, may help but serve to add debt to an existing debt problem. The regular Chapter 11 bankruptcy provides protection from creditors while a business reorganizes its debts, but it remains a costly and time-consuming option. If the situation exists as too dire, your business could just shut its doors. But, as a small business owner, you may still owe on your business debts as a personal guarantor. For instance, you will remain personally liable on an SBA loan even if your business closes its doors.
The new Chapter 11 bankruptcy went into effect in February of 2020. As such, a small business whose main debt consists of an SBA loan may use the new bankruptcy to reorganize the debt. Therefore, a bankruptcy reorganization may enable your small business to quickly and efficiently restructure its SBA debt. By reorganizing the debt, your small business may reduce its monthly debt obligation to coincide with its cash flow. A reorganization bankruptcy would allow your small business to continue operating.
If your San Diego County small business needs reorganization of its SBA loan debt, talk to one of our experienced attorneys today.
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 personal and corporate guarantees for an SBA 7(a) loan from a Preferred Lender Provider (PLP). The borrower corporation defaulted on the loan exposing all collateral pledged by the Clients. The SBA subsequently acquired the loan balance from the PLP, including the right to collect against all guarantors. The SBA sent the Official Pre-Referral Notice to the guarantors giving them sixty (60) days to either pay the outstanding balance in full, negotiate a Repayment (Offer in Compromise (OIC) or Structured Workout (SW)), challenge their alleged guarantor liability or file a Request for Hearing (Appeals Petition) with the SBA Office of Hearings & Appeals.
Because the Clients were not financially eligible for an OIC, they opted for Structured Workout negotiations directly with the SBA before the debt was transferred to the Bureau of Fiscal Service, a division of the U.S. Department of Treasury for enforced collection.
The Firm was hired to negotiate a global Workout Agreement directly with the SBA to resolve the personal and corporate guarantees. After submitting the Structured Workout proposal, the assigned SBA Loan Specialist approved the requested terms in under ten (10) days without any lengthy back and forth negotiations.
The favorable terms of the Workout included an extended maturity at an affordable principal amount, along with a significantly reduced interest rate saving the Clients approximately $181,000 in administrative fees, penalties and interest (contract interest rate and Current Value of Funds Rate (CVFR)) as authorized by 31 U.S.C. § 3717(e) had the SBA loan been transferred to BFS.
Clients personally guaranteed an SBA 7(a) loan that was referred to the Department of Treasury for collection. Treasury claimed our clients owed over $220,000 once it added its statutory collection fees and interest. We were able to negotiate a significant reduction of the total claimed amount from $220,000 to $119,000, saving the clients over $100,000 by arguing for a waiver of the statutory 28%-30% administrative fees and costs.
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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