Are you straining with your SBA loan repayment and you are opting to defer the loan. Read this article to know how you can get an SBA loan deferment.
Book a Consultation CallAre you struggling to pay your SBA loan? Are you unsure about what to do next?
If you're facing this dilemma, you're not alone. Half of all small businesses struggle financially and often fold in the first five years.
But it doesn't have to be this way. A simple loan deferment could help you get back on track and save your business.
Here's what you need to know about an SBA loan deferment.
Accumulating too much debt early on can be a huge problem for a small business. Falling into debt you can't pay can lead to mountains of interest that only compounds the problem.
When you're on the verge of losing your business, it's scary. You may be tempted to file bankruptcy to end the debt and the worrying.
However, you should avoid bankruptcy if at all possible. Declaring bankruptcy often doesn't make sense for a small business and will make it hard to get any future business loans.
Before you choose bankruptcy, you should know there are debt relief options that can help you manage your debt and keep your business running.
The current pandemic has affected small business owners everywhere. Although some small businesses were able to rebound quickly, others have struggled.
Although private financial institutions provide SBA loans, they are backed by the Federal government through the SBA. This means SBA loans are secure loans that require collateral.
If you default, the lender has a right to recover what you owe. That could put your collateral, including your primary residence, business assets, car, etc. at risk.
Eliminating your small business debt is crucial for getting your business moving in the right direction. You need financial relief so you can focus on running your business.
An experienced SBA debt attorney understands the stress you may be dealing with right now. They know that eliminating your debt is the first step toward financial freedom.
An SBA attorney may be able to negotiate for a sizable reduction in your small business debt, including a reduction in principal. For many business owners, a more manageable debt makes all the difference.
With the right guidance, you may be able to avoid bankruptcy and eliminate or greatly reduce your debt.
The role of an SBA attorney is to help you restructure your business debt and get the relief you need so you can focus on running your business. It's important to have a professional guiding you through this process.
Many debt relief companies claim they can help you resolve your debt problems but are unable to fulfill this promise. Having an experienced SBA attorney working for you ensures you have the best chance for debt relief.
A skilled negotiator knows how to deal with creditors, work to protect your rights, and get the best deal possible for you. Your SBA attorney will keep all your financial dealings confidential.
This ensures that your financial issues will remain private and will not disrupt your company's reputation.
Your attorney will work with your creditors to negotiate a lesser debt on your behalf. Creditors are more likely to offer a better deal when you have an attorney representing you.
An SBA attorney is familiar with collection laws and what a creditor can and cannot do when attempting to collect a debt. They will communicate directly with your creditors and will instruct them to stop contacting you.
If you are facing an SBA loan default, don't settle for bankruptcy.
Instead, hire a reputable SBA attorney to help you with the process of SBA debt settlement.
Before any litigation occurs, it's possible to enter into settlement negotiations with your lender for a deferment or other workout of the loan. A deferment provides you with some breathing room and enables you to get your business on the right track before paying your monthly loan commitment.
The terms of a deferment can vary as will the "catch up" provisions.
Every case is different. It's in your best interest to have an SBA attorney by your side every step of the way.
When you're faced with an SBA loan default, the worst thing to do is bury your head in the sand. The sooner you begin seeking a loan deferment, the better.
The worst case scenario most often results in the lender filing a lawsuit.
For this reason, the sooner you address the problem and begin working with an SBA attorney, the better.
Don't wait until it's too late to save your business. Start the SBA loan deferment process right away.
The experienced legal team of Protect Law Group provides real solutions for individuals facing SBA loan problems. We're here to help. Contact us today for a case evaluation.
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.
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.
Our firm successfully assisted a client in closing an SBA Disaster Loan tied to a COVID-19 Economic Injury Disaster Loan (EIDL). The borrower obtained an EIDL loan of $153,800, but due to the prolonged economic impact of the COVID-19 pandemic, the business was unable to recover and ultimately closed.
As part of the business closure review and audit, we worked closely with the SBA to negotiate a resolution. The borrower was required to pay only $1,625 to release the remaining collateral, effectively closing the matter without further financial liability for the owner/officer.
This case highlights the importance of strategic negotiations when dealing with SBA settlements, particularly for businesses that have shut down due to unforeseen economic challenges. If you or your business are struggling with SBA loan debt, we focus on SBA Offer in Compromise (SBA OIC) solutions to help settle outstanding obligations efficiently.
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