Bankruptcy Options for the Small Business Owner
Learn about different bankruptcy options for small business owners. Contact Protect Law Group serving San Diego, Orange, and Los Angeles Counties.
Learn how business loans and SBA loan forgiveness can affect your personal credit with Protect Law Group's expert guidance.
Book a Consultation CallWhen it comes to obtaining a business loan, one common concern that business owners often have is whether taking out a business loan will impact their personal credit report. This is a crucial question because maintaining a good personal credit score is essential for both financial stability and future opportunities. Protect Law Group understands the importance of this issue and aims to provide comprehensive insights into the relationship between business loans, SBA loans, and SBA loan forgiveness in regard to personal credit reports. Here is some helpful information about business loans and your personal credit report.
Securing a business loan is a significant milestone for entrepreneurs looking to start or expand their businesses. One key aspect that sets business loans apart from personal loans is how they are reported. Generally, business loans from traditional lenders or backed by the SBA are not reported on personal credit reports. Instead, business credit bureaus track these loans separately, helping business owners maintain a separation between their personal and business financial obligations.
Small Business Administration (SBA) loans are known for offering competitive interest rates, long repayment terms, and lower down payments, making them an attractive financing option for small businesses. One of the advantages of SBA loans is they do not directly impact the personal credit of business owners. This allows entrepreneurs to access the capital they need to grow their businesses while protecting their personal credit scores.
As businesses navigate the challenges of economic uncertainty, SBA loan forgiveness has become a critical lifeline for many entrepreneurs. However, it's essential to understand that forgiven SBA loans may have implications on personal credit if the forgiven amount is considered taxable income. This underscores the importance of strategic financial planning and tax management to mitigate any potential adverse effects on personal credit scores.
At Protect Law Group, we specialize in guiding businesses through the complexities of business loans, SBA loans, and loan forgiveness. Our experienced team provides personalized advice and strategic solutions to help business owners make informed decisions that align with their financial goals. By partnering with Protect Law Group, you can navigate the intricacies of business financing with confidence and clarity. Contact our SBA Attorneys today!
To sum it all up, the relationship between business loans, SBA loans, and personal credit reports is a nuanced one. While business loans typically do not appear on personal credit reports, it's crucial for business owners to be aware of the potential implications of SBA loan forgiveness on their personal credit. By working with Protect Law Group, you can access the expertise and guidance needed to make sound financial decisions and safeguard your personal credit standing.
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.
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.
Clients borrowed and personally guaranteed an SBA 7(a) loan. Clients defaulted on the SBA loan and were sued in federal district court for breach of contract. The SBA lender demanded the Client pledge several personal real estate properties as collateral to reinstate and secure the defaulted SBA loan. We were subsequently hired to intervene and aggressively defend the lawsuit. After several months of litigation, our attorneys negotiated a reinstatement of the SBA loan and a structured workout that did not involve any liens against the Client's personal real estate holdings.
Clients personally guaranteed an SBA 7(a) loan that was referred to the Department of Treasury for collection. Treasury claimed our clients owed over $220,000 once it added its statutory collection fees and interest. We were able to negotiate a significant reduction of the total claimed amount from $220,000 to $119,000, saving the clients over $100,000 by arguing for a waiver of the statutory 28%-30% administrative fees and costs.
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