Small businesses could face serious financial issues that could lead to a SBA loan default. If this occurs, the lender is within their rights to file for a foreclosure. Once this begins, the business owner could face difficulty stopping it. A SBA Offer in Compromise could provide an opportunity to prevent the serious impact on the business owner's credit rating.
These offers are a settlement offered to the lender that is lower than the total outstanding balance. An attorney provides the borrower with an appropriate percentage to offer to the lender. They prepare the documentation of the settlement and submit to the lender. By representing the borrower, they help the business owner protect their business against further negative actions.
The first step for the business owner is to approach an attorney as soon as they receive the SBA demand letter. Once they receive the letter, they have a deadline assigned. The borrower must take action before this deadline or face immediate foreclosure. This could shut down their company entirely. It could also prevent them from acquiring a new business location in the future. Once the foreclosure occurs, the business owner is still responsible for the debt.
The attorney presents the settlement offer to the lender. They negotiate the settlement and may increase the percentage required. These loans are guaranteed by the Small Business Administration and require the business owner to submit a portion of the outstanding balance. The attorney works with the lender to determine a fair value and presents this value to the business owner.
Once the lender accepts the settlement, the remaining balance is written off. The attorney could help the business owner offset any additional taxes or fees. This could present the business owner with the most appropriate solution to stop the SBA loan foreclosure now.
Small business owners should take action when they receive a notification of default. A default gives their lender the right to file for a foreclosure and seize their property. For most small business owners, seizure could lead to a total shutdown of their business. Owners who need to acquire a settlement or Tax Offset Program should contact an attorney now.
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 executed personal and corporate guarantees for an SBA 7(a) loan from a Preferred Lender Provider (PLP). The borrower corporation defaulted on the loan exposing all collateral pledged by the Clients. The SBA subsequently acquired the loan balance from the PLP, including the right to collect against all guarantors. The SBA sent the Official Pre-Referral Notice to the guarantors giving them sixty (60) days to either pay the outstanding balance in full, negotiate a Repayment (Offer in Compromise (OIC) or Structured Workout (SW)), challenge their alleged guarantor liability or file a Request for Hearing (Appeals Petition) with the SBA Office of Hearings & Appeals.
Because the Clients were not financially eligible for an OIC, they opted for Structured Workout negotiations directly with the SBA before the debt was transferred to the Bureau of Fiscal Service, a division of the U.S. Department of Treasury for enforced collection.
The Firm was hired to negotiate a global Workout Agreement directly with the SBA to resolve the personal and corporate guarantees. After submitting the Structured Workout proposal, the assigned SBA Loan Specialist approved the requested terms in under ten (10) days without any lengthy back and forth negotiations.
The favorable terms of the Workout included an extended maturity at an affordable principal amount, along with a significantly reduced interest rate saving the Clients approximately $181,000 in administrative fees, penalties and interest (contract interest rate and Current Value of Funds Rate (CVFR)) as authorized by 31 U.S.C. § 3717(e) had the SBA loan been transferred to BFS.
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.
Clients personally guaranteed SBA 504 loan balance of $750,000. Clients also pledged the business’s equipment/inventory and their home as additional collateral. Clients had agreed to a voluntary sale of their home to pay down the balance. We intervened and rejected the proposed home sale. Instead, we negotiated an acceptable term repayment agreement and release of lien on the home.
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