Better understand the approval process for an SBA Offer in Compromise (OIC). Explore SBA loan forgiveness with Protect Law Group. Contact us!
Book a Consultation CallWhen facing financial challenges due to Small Business Administration (SBA) loans, it is essential to explore all available options to minimize damage to your business or personal assets. One such option is the SBA Offer in Compromise (OIC), which aims to settle SBA debt with your lender. While you’ll still be responsible for a smaller portion of the loan, an Offer in Compromise will settle the entirety of your loan.
Today, our SBA loan attorney is here to discuss the factors considered in the approval of an OIC and how it can provide concrete solutions for small businesses seeking debt relief.
The first step in the approval process for an OIC is a comprehensive evaluation of the applicant's financial status. This assessment analyzes the business's income, assets, liabilities, and overall financial viability. The Small Business Administration assesses the applicant's ability to pay back the debt without adversely affecting their current financial situation.
To qualify for an OIC, the applicant must demonstrate their inability to repay the SBA loan in full. This requires presenting evidence of economic hardship, such as declining revenues, increased operating costs, or unforeseen circumstances like a natural disaster or economic downturn.
Determining the offer amount plays a crucial role in the approval of an OIC. The Small Business Administration carefully evaluates the applicant's financial information to arrive at a reasonable offer that considers their ability to pay and the outstanding debt balance. Factors such as current assets, future earnings potential, and available cash flow are taken into account during this calculation.
Applicants must adhere to the guidelines set by the SBA when submitting an OIC. This includes providing accurate and complete financial documentation, responding promptly to inquiries, and demonstrating a genuine intent to settle the debt. Compliance with these guidelines increases the chances of approval.
Having knowledgeable and experienced legal representation can significantly impact the approval process of an OIC. Working with attorneys specializing in SBA debt relief ensures proper preparation of the OIC, accurate calculations, and effective negotiation strategies. Professional representation can increase the likelihood of a favorable outcome.
Obtaining approval for an SBA Offer in Compromise requires careful consideration of multiple factors. By conducting a thorough financial assessment, demonstrating economic hardship, calculating a fair offer amount, complying with guidelines, and seeking professional representation, small businesses can significantly increase their chances of debt settlement and obtain much-needed relief.
At Protect Law Group, we specialize in helping our clients navigate the intricate approval process for an OIC, ensuring the best possible outcome for their SBA debt issues. If you are located in San Diego, Orange, or Los Angeles County, let our team provide you with concrete solutions and guide you toward a better financial future. Contact us today!
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 to help with a relative’s new business venture. After the business failed, Treasury was able to secure a recurring Treasury Offset Program (TOP) levy against his monthly Social Security Benefits based on the claim that he owed over $1.2 million dollars. We initially submitted a Cross-Servicing Dispute, but then, prepared and filed an Appeals Petition with the SBA Office of Hearings and Appeals (SBA OHA). As a result of our efforts, we were able to convince the SBA to not only terminate the claimed debt of $1.2 million dollars against our client (without him having to file bankruptcy) but also refund the past recurring amounts that were offset from his Social Security Benefits in connection with the TOP levy.
Our firm successfully resolved an SBA 7(a) loan default in the amount of $140,000 on behalf of a husband-and-wife guarantor pair. The business had closed following a prolonged decline in revenue, leaving the borrowers personally liable for the remaining balance.
After conducting a comprehensive financial analysis and preparing a detailed SBA Offer in Compromise (SBA OIC) package, we negotiated directly with the SBA and the lender to achieve a settlement for $70,000 — just 50% of the outstanding balance. This settlement released the borrowers from further personal liability and allowed them to move forward without the threat of enforced collection.
Our firm successfully resolved an SBA COVID-19 Economic Injury Disaster Loan (EIDL) in the original amount of $150,000 for a Florida-based borrower. The loan, issued on June 4, 2020, was secured by business assets and potential personal liability through the SBA's Security Agreement.
Following the permanent closure of the business, we guided the client through the SBA’s Business Closure Review process and prepared a comprehensive collateral analysis. We negotiated directly with the SBA, obtaining a full release of the business collateral for $2,910 — satisfying the borrower’s obligations under the Security Agreement and eliminating any further enforcement risk against the pledged assets.
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