When to Seek Out an SBA Offer in Compromise
Are you unsure of whether or not you need an SBA offer in compromise? Our team is here to help advise you as to when to seek out an offer in compromise.
The transcript of the video follows below for further review.
SBA loans are the lifeblood for many industries. Many small businesses fail and the most recent recession was no exception resulting in a large number of small business failures. If you defaulted on an SBA loan are you necessarily precluded from obtaining another SBA loan? You may be able to obtain an SBA loan but it will be an uphill climb.
Unless waived by SBA for good cause, the SBA cannot provide assistance to a borrower that has previously defaulted on a Federal loan or Federally assisted financing, resulting in a loss to the Federal government; or owned or controlled by a business or any of its associates which previously owned, operated, or controlled a business which defaulted on an SBA loan and caused the Federal government to sustain a loss.
When a SBA loan default occurs, the borrower and the personal guarantors are placed on the credit alert interactive voice response system (CAIVRS), which essentially amounts to a “do not lend” list.
All is not lost, you can receive a waiver from the do no lend status where you can show “good cause.” When there are compelling circumstances, the lender shall send a written request for a waiver to the SBA
office processing the loan.
The lender must explain:
(A) the circumstances surrounding the prior loss and the relationship of the applicant to the entity causing the loss; and
(B) the connection between the individuals associated with the prior loss and the individuals requesting the new assistance.
This rule applies to:
1. The small business applicant;
2. Any business in which a principal of the small business applicant was also a principal in the entity that caused the loss;
or
3. Any business controlled by the same person(s) who controlled the entity that caused the loss.
If you are facing an SBA loan default, contact us today for a FREE initial consultation with an experienced SBA workout attorney at 888-756-9969
We analyze your SBA loan problems and advise you on potential solutions such as an SBA offer in compromise for your SBA loan default.
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.
The client personally guaranteed an SBA 504 loan balance of $375,000. Debt had been cross-referred to the Treasury at the time we got involved with the case. We successfully had debt recalled to the SBA where we then presented an SBA OIC that was accepted for $58,000.
Clients personally guaranteed an SBA 504 loan balance of $337,000. The Third Party Lender had obtained a Judgment against the clients. We represented clients before the SBA and negotiated an SBA OIC that was accepted for $30,000.
Clients obtained an SBA 7(a) loan for their small business in the amount of $298,000. They pledged their primary residence and personal guarantees as direct collateral for the loan. The business failed, the lender was paid the 7(a) guaranty money and the debt was assigned to the SBA. Clients received the Official 60-Day Notice giving them a couple of options to resolve the debt balance directly with the SBA before referral to Treasury's Bureau of Fiscal Service. The risk of referral to Treasury would add nearly $95,000 to the SBA principal loan balance. With the default interest rate at 7.5%, the amount of money to pay toward interest was projected at $198,600. Clients hired the Firm with only 4 days left to respond to the 60-Day due process notice. Because the clients were not eligible for an Offer in Compromise (OIC) due to the significant equity in their home and the SBA lien encumbering it, the Firm Attorneys proposed a Structured Workout to resolve the SBA debt. After back and forth negotiations, the SBA Loan Specialist assigned to the case approved the Workout terms which prevented potential foreclosure of their home, but also saved the clients approximately $294,000 over the agreed-upon Workout term with a waiver of all contractual and statutory administrative fees, collection costs, penalties, and interest.
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