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.
SBA Loan Forgiveness can be a challenging process. Don’t go through it alone, as Protect Law Group is here to help! Learn more today.
Book a Consultation CallSecuring forgiveness for Small Business Administration (SBA) loans is a critical, yet challenging, task for many small business owners. While SBA loans provide essential relief, the forgiveness process can be complex and fraught with obstacles. Understanding these challenges, including recent updates and regulations, is crucial. This blog explores common issues businesses face and how Protect Law Group can assist with essential SBA loan help.
A major challenge in SBA loan forgiveness is navigating the complex and evolving requirements. Initial provisions under the CARES Act were broad, but subsequent updates have introduced new rules concerning fund usage and employee retention. Staying informed and compliant with these regulations is vital for maximizing forgiveness.
Proper documentation is crucial but often problematic. The SBA requires detailed records of how loan funds were used, including payroll, rent, and utilities. Errors or missing information can delay or deny forgiveness. Partnering with an SBA loan attorney from Protect Law Group ensures accurate documentation and reduces the risk of issues.
Meeting specific spending requirements is essential for forgiveness. Loans must be used mainly for payroll, with up to 40% allowed for other expenses. Recent changes have adjusted these thresholds and timelines. An SBA loan attorney can provide guidance on correct fund allocation to comply with the latest rules.
Maintaining the required number of employees is another challenge. The SBA forgiveness program often mandates that businesses retain or restore staffing levels to pre-pandemic numbers. If retaining staff is difficult, businesses may struggle to meet this criterion. Protect Law Group offers SBA loan help to address these retention issues and navigate workforce requirements.
The SBA forgiveness landscape is continuously evolving. New rules and amendments can affect eligibility and terms. Staying current with these changes is essential. Protect Law Group’s expertise in the latest SBA regulations can help businesses adapt and make informed decisions.
Sometimes, businesses face challenges during the review process or receive a denial. Navigating the appeal process requires a thorough understanding of SBA procedures. An SBA loan attorney from Protect Law Group can assist with preparing and presenting an effective appeal.
Navigating SBA loan forgiveness involves addressing complex requirements, documentation issues, and compliance challenges. With recent updates and evolving regulations, the process can be daunting. Protect Law Group offers invaluable SBA loan help, providing expert guidance to overcome these obstacles and enhance your chances of successful forgiveness. Partnering with our attorneys ensures that you can manage these challenges effectively and focus on your business's growth and recovery.
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.
Client personally guaranteed an SBA 7(a) loan for $100,000 from the lender. The SBA loan went into early default in 2006 less than 12 months from disbursement. The SBA paid the 7(a) guaranty monies to the lender and subsequently acquired the deficiency balance of about $96,000, including the right to collect against the guarantor. However, the SBA sent the Official 60-Day Due Process Notice to the Client's defunct business address instead of his personal residence, which he never received. As a result, the debt was transferred to Treasury's Bureau of Fiscal Service where substantial collection fees were assessed, including accrued interest per the promissory note. Treasury eventually referred the debt to a Private Collection Agency (PCA) - Pioneer Credit Recovery, Inc. Pioneer sent a demand letter claiming a debt balance of almost $310,000 - a shocking 223% increase from the original loan amount assigned to the SBA. Client's social security disability benefits were seized through the Treasury Offset Program (TOP). Client hired the Firm to represent him as the debt continued to snowball despite seizure of his social security benefits and federal tax refunds as the involuntary payments were first applied to Treasury's collection fees, then to accrued interest with minimal allocation to the SBA principal balance.
We initially submitted a Cross-Servicing Dispute (CSD) challenging the referral of the debt to Treasury based on the defective notice sent to the defunct business address. Despite overwhelming evidence proving a violation of the Client's Due Process rights, the SBA still rejected the CSD. As a result, an Appeals Petition was filed with the SBA Office of Hearings & Appeals (OHA) Court challenging the SBA decision and its certification the debt was legally enforceable in the amount claimed. After several months of litigation before the SBA OHA Court, our Firm Attorney successfully negotiated an Offer in Compromise (OIC) Term Workout with the SBA Supervising Trial Attorney for $82,000 spread over a term of 74 months at a significantly reduced interest rate saving the Client an estimated $241,000 in Treasury collection fees, accrued interest (contract interest rate and Current Value of Funds Rate (CVFR)), and the PCA contingency fee.
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.
Clients personally guaranteed SBA 7(a) loan balance of over $300,000. Clients also pledged their homes as additional collateral. SBA OIC accepted $87,000 with the full lien release against the home.
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