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Can I Obtain Another SBA Loan After A Default?

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Can I Obtain Another SBA Loan After A Default?


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;


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.

Why Hire Us to Help You with Your Treasury or SBA Debt Problems?

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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

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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

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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.



Client personally guaranteed SBA 7(a) loan for $150,000. COVID-19 caused the business to fail, and the loan went into default with a balance of $133,000. Client initially hired a non-attorney consultant to negotiate an OIC. The SBA summarily rejected the ineligible OIC and the debt was referred to Treasury’sBureau of Fiscal Service for enforced collection in the debt amount of $195,000. We were hired to intervene and initiated discovery for SBA and Fiscal Service records. We were able to recall the case from Fiscal Service back to the SBA. We then negotiated a structured workout with favorable terms that saves the client approximately $198,000 over the agreed-upon workout term by waiving contractual and statutory administrative fees, collection costs, penalties, and interest.



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.

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