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.
Our firm successfully negotiated an SBA offer in compromise (SBA OIC), settling a $974,535.93 SBA loan balance for just $18,000. The offerors, personal guarantors on an SBA 7(a) loan, originally obtained financing to purchase a commercial building in Lancaster, California.
The borrower filed for bankruptcy, and the third-party lender (TPL) foreclosed on the property. Despite the loan default, the SBA pursued the offerors for repayment. Given their limited income, lack of significant assets, and approaching retirement, we presented a strong case demonstrating their financial hardship.
Through strategic negotiations, we secured a favorable SBA settlement, reducing the nearly $1 million debt to a fraction of the amount owed. This outcome allowed the offerors to resolve their liability without prolonged financial strain.
Clients obtained an SBA 7(a) loan for $324,000 to buy a small business and its facility. The business and real estate had an appraisal value of $318,000 at the time of purchase. The business ultimately failed but the participating lender abandoned the business equipment and real estate collateral even though it had valid security liens. As a result, the lender recouped nearly nothing from the pledged collateral, leaving the business owners liable for the deficiency balance. The SBA paid the lender the 7(a) guaranty money and was assigned ownership of the debt, including the right to collect. However, the clients never received the SBA Official 60-Day Notice and were denied the opportunity to negotiate an Offer in Compromise (OIC) or a Workout directly with the SBA before being transferred to Treasury's Bureau of Fiscal Service, which added an additional $80,000 in collection fees. Treasury garnished and offset the clients' wages, federal salary and social security benefits. When the clients tried to negotiate with Treasury by themselves, they were offered an unaffordable repayment plan which would have caused severe financial hardship. Clients subsequently hired the Firm to litigate an Appeals Petition before the SBA Office & Hearings Appeals (OHA) challenging the legal enforceability and amount of the debt. The Firm successfully negotiated a term OIC that was approved by the SBA Office of General Counsel, saving the clients approximately $205,000.
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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