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Navigating SBA Loan Programs

Are you interested in learning more about the various types of SBA Loan Programs? Protect Law Group is here to keep you informed. Learn more today!

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Navigating SBA Loan Programs

Navigating the various Small Business Administration (SBA) loan programs can be a challenging task for many small business owners. These loan programs are designed to provide financial assistance and support to businesses that might otherwise struggle to secure funding. Understanding the different types of SBA loans, eligibility criteria, and application processes is crucial for maximizing the benefits they offer. In this blog, Protect Law Group will explore the key aspects of SBA loans and provide essential tips for businesses seeking financial assistance.

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Types of SBA Loans

The SBA offers several loan programs to cater to different business needs. The most common types include:

  • 7(a) Loan Program: This is the SBA's primary program for providing financial assistance to small businesses. It offers loan amounts up to $5 million and can be used for various purposes, including working capital, equipment purchases, and real estate.
  • 504 Loan Program: This program provides long-term, fixed-rate financing for major fixed assets, such as real estate and equipment. It is designed to promote business growth and job creation.
  • Microloan Program: These loans are smaller, with a maximum amount of $50,000. They are ideal for startups and small businesses needing smaller amounts of capital for working capital, inventory, or equipment.
  • Disaster Loans: These loans provide financial assistance to businesses affected by natural disasters. They help businesses repair or replace damaged property, equipment, and inventory.

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Eligibility Criteria

Each SBA loan program has specific eligibility criteria that businesses must meet. Generally, to qualify for an SBA loan, a business must:

  • Be a for-profit business operating in the United States.
  • Meet the SBA's definition of a small business.
  • Demonstrate a need for the loan and the ability to repay it.
  • Have a sound business purpose and a clear plan for using the loan funds.

Specific programs may have additional requirements, so it's essential to review the criteria for the particular loan you're interested in.

Application Process

The application process for SBA loans can be complex and time-consuming. It typically involves:

  • Preparing Documentation: Gather all necessary documents, including financial statements, tax returns, business plans, and personal financial information.
  • Choosing the Right Loan Program: Select the SBA loan program that best fits your business needs.
  • Finding a Lender: SBA loans are issued through approved lenders. You'll need to find a participating lender and work with them to complete your application.
  • Submitting the Application: Complete the application forms and submit them along with your supporting documents to the lender.
  • Underwriting and Approval: The lender will review your application, underwrite the loan, and submit it to the SBA for final approval.

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Tips for Small Businesses

  • Partnering with experienced professionals, such as the SBA loan attorneys at Protect Law Group, can provide invaluable guidance and support. We can help you understand requirements, prepare your application, and negotiate favorable terms. 
  • Maintaining a strong credit history, both personal and business, is essential, as it enhances loan approval prospects. 
  • Ensure all documentation is complete, accurate, and well-organized to expedite the process.
  • Patience and responsiveness are crucial, as the SBA loan process can be time-consuming. 

By following these tips and seeking SBA loan help from Protect Law Group, small businesses can improve their chances of securing the financial assistance they need.

A stack of documents

Common Challenges

Securing an SBA loan can be challenging due to stringent requirements and extensive documentation. Common obstacles include poor credit history, insufficient collateral, and lack of a solid business plan. An SBA loan attorney can provide valuable SBA loan help to overcome these challenges and improve your chances of success.

A happy women standing in front of her business with an open sign

Benefits of SBA Loans

SBA loans offer several advantages, including lower down payments, longer repayment terms, and lower interest rates compared to traditional loans. These benefits can significantly improve a business's cash flow and financial stability.

An SBA loan attorney can be an invaluable resource in this journey, helping you navigate the complexities and achieve your business goals. Contact Protect Law Group to get started today!

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Why Hire Us to Help You with Your Treasury or SBA Debt Problems?

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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

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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

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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.

$1,500,000 SBA COVID-EIDL LOAN - SBA OHA LITIGATION

$1,500,000 SBA COVID-EIDL LOAN - SBA OHA LITIGATION

Small business and guarantors obtained an SBA COVID-EIDL loan for $1,000,000. Clients defaulted causing SBA to charge-off the loan, accelerate the balance and refer the debt to Treasury's Bureau of Fiscal Service for collection. Treasury added nearly $500,000 in collection fees totaling $1,500,000. Clients were served with the SBA's Official 60-Day Notice and exercised the Repayment option by applying for the SBA’s Hardship Accommodation Plan. However, their application was summarily rejected by the SBA without providing any meaningful reasons. Clients hired the Firm to represent them against the SBA, Treasury and a Private Collection Agency.  After securing government records through discovery, we filed an Appeals Petition with the SBA Office of Hearings & Appeals (OHA) court challenging the SBA's referral of the debt to Treasury. During litigation and before the OHA court issued a final Decision and Order, the Firm successfully negotiated a reinstatement and recall of the loan back to the SBA, a modification of the original repayment terms, termination of Treasury's enforced collection and removal of the statutory collection fees.

$750,000 SBA 504 LOAN - NEGOTIATED TERM REPAYMENT AGREEMENT

$750,000 SBA 504 LOAN - NEGOTIATED TERM REPAYMENT AGREEMENT

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.

$166,000 SBA 7A LOAN - NEGOTIATED WORKOUT AGREEMENT

$166,000 SBA 7A LOAN - NEGOTIATED WORKOUT AGREEMENT

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.

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