What Does the Banking Meltdown Mean for SBA Loans
With the meltdown of SVB and Signature banks and other banks teetering it may affect SBA loans in the future and current loans as well.
Dealing with SBA Bankruptcy? A SBA offer in compromise may help get you out of this difficult situation. Protect Law Group is here to help. Find out more today!
Book a Consultation CallFinancial difficulties can be overwhelming, especially when it comes to dealing with SBA loan debts. However, there is a potential solution that can provide relief for small business owners and guarantors – the SBA Offer in Compromise (OIC). In this blog, our team at Protect Law Group will guide you through the intricacies of the SBA OIC process, outlining the steps you need to take to navigate this challenging situation successfully.
Before you proceed with the SBA OIC, it is crucial to determine if you meet the eligibility criteria. An SBA OIC is usually an option when a small business has ceased operations, and all its assets have been liquidated. Additionally, the borrower or guarantor must demonstrate their inability to pay the full debt amount within a reasonable time frame. It is recommended to consult with an experienced SBA loan attorney to assess your eligibility and understand the potential outcomes.
To initiate the SBA OIC process, you will need to gather the necessary documentation. This includes financial statements, tax returns, bank statements, and any other relevant financial records. These documents support your case by providing a comprehensive overview of your financial situation. An experienced SBA loan attorney can help you organize and present this information effectively.
Cooperation and effective communication play a vital role in maximizing the chances of a successful settlement through the SBA OIC. It is essential to work closely with your SBA loan attorney and the SBA debt attorneys to ensure your unique circumstances are understood and presented accurately. By clearly presenting your financial limitations and actively participating in the process, you can increase the likelihood of a favorable outcome.
When pursuing an SBA OIC, several potential outcomes can arise. One possibility is having your offer accepted, resulting in a reduced repayment amount that is manageable for your financial situation. Another outcome may involve negotiating a repayment plan that suits your circumstances, such as a monthly installment payment plan not exceeding five years. It is crucial to discuss these potential outcomes with your SBA loan attorney to determine the best course of action for your specific situation.
Dealing with SBA loan debts can be challenging, but the SBA Offer in Compromise provides a ray of hope for struggling borrowers and guarantors. By understanding the eligibility criteria, gathering the necessary documentation, and maintaining open lines of communication, you can navigate the SBA OIC process effectively. Remember, the assistance of an experienced SBA loan attorney, such as our team at Protect Law Group, is invaluable during this journey of finding business debt relief and securing SBA loan help. If you are facing financial difficulties, don't hesitate to reach out to our team of SBA debt attorneys for guidance and support.
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' 7(a) loan was referred to Treasury's Bureau of Fiscal Service for enforced collection in 2015. They not only personally guaranteed the loan, but also pledged their primary residence as additional collateral. One of the clients filed for Chapter 7 bankruptcy thinking that it would discharge the SBA 7(a) lien encumbering their home. They later discovered that they were mistakenly advised. The Firm was subsequently hired to review their case and defend against a series of collection actions. Eventually, we were able to negotiate a structured workout for $180,000 directly with the SBA, saving them approximately $250,000 (by reducing the default interest rate and removing Treasury's substantial collection fees) and from possible foreclosure.
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.
The client personally guaranteed an SBA 504 loan balance of $375,000. Debt had been cross-referred to the Treasury at the time we got involved with the case. We successfully had debt recalled to the SBA where we then presented an SBA OIC that was accepted for $58,000.
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