What Happens If I Don't Pay Back An SBA Loan?
What happens if you don't pay back your SBA loan? If you signed a personal guarantee, the SBA and the federal government will want you to pay the loan.
Small business owners may face serious financial difficulties. When these difficulties present issues such as foreclosure, the owner must take immediate action to prevent seizure of their property. An attorney helps these business owners acquire an SBA Offer in Compromise to prevent these issues.
The business owner must take action as soon as they receive the SBA demand letter. They should bring the letter to their attorney for further review. The attorney needs the loan contract acquired by the business owner as well. The terms dictate what actions are possible to prevent foreclosure. These terms tell the attorney what they need to do to approach the lender to acquire the compromise and prevent further legal action.
An SBA loan foreclosure gives the lender the right to seize the property for sale. These government loans are secured by a guarantee that the business owner will pay at least a specific percentage. The loan documents dictate the total value of the guarantee. It may present the business owner with the opportunity to negotiate a reduced settlement. If they have generated equity in the property, the attorney could acquire this reduction easily.
Thea attorney acquires a guarantee for the settlement value. This prevents the lender from changing their mind and fighting against the business owner. The attorney helps the business owner manage the terms of the settlement and submit the required value without issues. They prevent further repercussions of an SBA loan default through these measures.
Businesses that are in financial trouble may also face overwhelming tax liabilities. The attorney helps them through a Tax Offset Program. The program helps them to acquire a settlement through the IRS.
Small businesses need further assistance when they face foreclosure. An attorney helps them to manage government-backed loans. These loans require a specific value to settle them properly. They also provide extra protection for the borrower. Business owners who are facing adverse legal action including foreclosure should contact an attorney 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.
Our firm successfully resolved an SBA 7a loan in the original amount of $364,000 for a New Jersey-based borrower. The client filed Chapter 7 bankruptcy but the mortgage on his real estate securing the loan remained in place. The available equity amounted to $263,470 and the deficiency equaled $317,886.
We gathered the pertinent documentation and prepared a comprehensive collateral analysis. We negotiated directly with the SBA, obtaining a full release of the mortgage for $80,000.
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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