Having experienced legal representation is essential when it comes to settling your SBA debt. Contact Protect Law Group in Carlsbad, CA today!
Book a Consultation CallWhen it comes to managing small business finances, one area that entrepreneurs often overlook is the importance of addressing Small Business Administration (SBA) debts. Whether you have taken out an SBA loan or are facing repayment issues, understanding the significance of seeking experienced legal representation is crucial. In this blog post, Protect Law Group will explore the reasons why managing SBA debts with the help of a knowledgeable attorney can make a significant difference in the success of your business.
The Small Business Administration has specific regulations and guidelines that govern its loan programs. Understanding these regulations can be complex and overwhelming for business owners. An experienced attorney specializing in SBA debts can guide you through the intricacies of compliance, ensuring that you are aware of your rights and responsibilities. This knowledge will help you avoid penalties, maintain a good relationship with the SBA, and protect your business interests.
SBA loan repayment can be a challenging task, especially during times of financial hardship. An experienced attorney can assess your financial situation, analyze the terms of your loan agreement, and develop a customized repayment strategy. They can negotiate with lenders on your behalf, exploring options such as loan modifications, debt settlements, or even loan forgiveness programs. Having a lawyer who understands the intricacies of SBA debts can significantly increase your chances of finding a viable solution that aligns with your business's financial capabilities.
Dealing with SBA debts can have significant repercussions for your business's assets and personal finances. If your debt remains unresolved, the SBA may take legal action to recover the amount owed. This could result in the seizure of your business assets, placing your livelihood at risk. By having an experienced attorney on your side, you can protect your assets and explore alternatives, such as negotiating improved repayment terms or restructuring your business to shield your finances.
Mismanaging SBA debts can have severe consequences for your credit score, making it challenging to secure funding in the future. A knowledgeable attorney can help you navigate the debt collection process, ensuring that your rights are protected throughout. They can also assist in preventing abusive debt collection practices and protect your reputation so that your business can continue to thrive even during challenging financial times.
Addressing SBA debts with the help of experienced legal representation is essential for small businesses. From navigating complex regulations and developing a repayment strategy to protecting your assets and avoiding adverse consequences, an attorney specializing in SBA debts can play a pivotal role in securing the financial stability of your business. By seeking professional guidance, you can effectively manage your SBA debts, mitigate risks, and pave the way for long-term success. Contact Protect Law Group serving San Diego, Orange, and Los Angeles Counties, California to learn more.
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’s small business obtained an SBA 7(a) loan for $750,000. She and her husband signed personal guarantees exposing all of their non-exempt income and assets. With just 18 months left on the maturity date and payment on the remaining balance, the Great Recession of 2008 hit, which ultimately caused the business to fail and default on the loan terms. The 7(a) lender accelerated and sent a demand for full payment of the remaining loan balance. The SBA lender’s note allowed for a default interest rate of about 7% per year. In response to the lender's aggressive collection action, Client's husband filed for Chapter 7 bankruptcy in an attempt to protect against their personal assets. However, his bankruptcy discharge did not relieve the Client's personal guarantee liability for the SBA debt. The SBA lender opted to pursue the SBA 7(a) Guaranty and subsequently assigned the loan and the right to enforce collection against the Client to the SBA. The Client then received the SBA Official 60-Day Notice. After conducting a Case Evaluation with her, she then hired the Firm to respond and negotiate on her behalf with just 34 days left before the impending referral to Treasury. The Client wanted to dispute the SBA’s alleged debt balance as stated in the 60-Day Notice by claiming the 7(a) lender failed to liquidate business collateral in a commercially reasonable manner - which if done properly - proceeds would have paid back the entire debt balance. However, due to time constraints, waivers contained in the SBA loan instruments, including the fact the Client was not able to inspect the SBA's records for investigation purposes before the remaining deadline, Client agreed to submit a Structured Workout for the alleged balance in response to the Official 60-Day Notice as she was not eligible for an Offer in Compromise (OIC) because of equity in non-exempt income and assets. After back and forth negotiations, the SBA Loan Specialist approved the Workout proposal, reducing the Client's purported liability by nearly $142,142.27 in accrued interest, and statutory collection fees. Without the Firm's intervention and subsequent approval of the Workout proposal, the Client's debt amount (with accrued interest, Treasury's statutory collection fee and Treasury's interest based on the Current Value of Funds Rate (CVFR) would have been nearly $291,030.
Clients personally guaranteed SBA 7(a) loan balance of over $300,000. Clients also pledged their homes as additional collateral. SBA OIC accepted $87,000 with the full lien release against the home.
Clients executed several trust deeds pledging seven (7) real estate properties and unconditional personal guarantees for an SBA 7(a) loan from the participating lender. The clients' small business failed and eventually defaulted on repayment of the loan exposing all collateral pledged by the clients. The SBA subsequently acquired the loan balance from the lender, including the right to liquidate and collect all pledged collateral pursuant to the trust deed instruments.
The Firm was hired to negotiate separate release of lien proposals for all 7 real estate properties. In preparation for the work assignment, the Firm Attorneys initiated discovery to secure records from the SBA and Treasury's Bureau of Fiscal Service. After reviewing the records and understanding the interplay between the lender and the SBA, the attorneys then prepared, submitted and negotiated the release of lien (ROL) for each of the 7 real estate properties for consideration.
After submitting the proposals, the assigned SBA Loan Specialists approved each ROL package - significantly reducing the total SBA debt claimed.
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