A loan guaranteed by the Small Business Administration can open a lot of doors for a business. They could use the funds to purchase real estate, equipment or even to finance their debts. Unfortunately, because this economy is still not completely back on track following the recent recession, it's quite possible a company will run into problems paying their SBA loan. Although it might be possible for a business owner to negotiate a settlement after they receive an SBA demand letter, it could be much easier to manage with the help of an attorney.
SBA loan default is a serious matter and each case is as different as every business that uses this loan program. Default could result in SBA loan foreclosure or seizure of business or even personal tax refunds through the Tax Offset Program. Neither of these options are going to be very appealing to a business owner who is struggling to keep their company afloat. The first step a business owner should take when they are faced with this situation is to find an attorney who has enough experience in this area to analyze each case individually and devise a solution that could benefit the business owner and the SBA.
Any business owner who has defaulted on an SBA loan can send an SBA Offer in Compromise to attempt to settle the debt. The SBA carefully evaluates each request for this type of loan forgiveness and if there are any errors, omissions or misrepresentations, the application is likely to be denied and the business owner will have to find another way to resolve the debt. Instead of going through this process alone, an entrepreneur might have a much better chance of success if they work with an attorney who has a proven track record.
This is not something business owners need to handle alone. Getting professional help is essential to having a favorable outcome in this complicated debt situation. Once an entrepreneur knows what they want to get out of the process, they should contact an attorney to give them the best chance of getting something close to that result.
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.
Small business sole proprietor obtained an SBA COVID-EIDL loan for $500,000. Client defaulted causing SBA to charge-off the loan, accelerate the balance and refer the debt to Treasury's Bureau of Fiscal Service for aggressive collection. Treasury added $180,000 in collection fees totaling $680,000+. Client tried to negotiate with Treasury but was only offered a 3-year or 10-year repayment plan. Client hired the Firm to represent before the SBA, Treasury and a Private Collection Agency. After securing government records through discovery and reviewing them, we filed an Appeals Petition with the SBA Office of Hearings & Appeals (OHA) court challenging the SBA's referral of the debt to Treasury citing a host of purported violations. The Firm was able to negotiate a reinstatement and recall of the loan back to the SBA, participation in the Hardship Accommodation Plan, termination of Treasury's enforced collection and removal of the statutory collection fees.
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.
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