Elements of a Successful SBA Offer in Compromise
SBA loan settlements require specific knowledge of current policies and changes. Here are the elements of a successful SBA offer in compromise.
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.
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.
Clients obtained an SBA 7(a) loan for their small business in the amount of $298,000. They pledged their primary residence and personal guarantees as direct collateral for the loan. The business failed, the lender was paid the 7(a) guaranty money and the debt was assigned to the SBA. Clients received the Official 60-Day Notice giving them a couple of options to resolve the debt balance directly with the SBA before referral to Treasury's Bureau of Fiscal Service. The risk of referral to Treasury would add nearly $95,000 to the SBA principal loan balance. With the default interest rate at 7.5%, the amount of money to pay toward interest was projected at $198,600. Clients hired the Firm with only 4 days left to respond to the 60-Day due process notice. Because the clients were not eligible for an Offer in Compromise (OIC) due to the significant equity in their home and the SBA lien encumbering it, the Firm Attorneys proposed a Structured Workout to resolve the SBA debt. After back and forth negotiations, the SBA Loan Specialist assigned to the case approved the Workout terms which prevented potential foreclosure of their home, but also saved the clients approximately $294,000 over the agreed-upon Workout term with a waiver of all contractual and statutory administrative fees, collection costs, penalties, and interest.
Our firm successfully negotiated an SBA offer in compromise (SBA OIC), settling a $974,535.93 SBA loan balance for just $18,000. The offerors, personal guarantors on an SBA 7(a) loan, originally obtained financing to purchase a commercial building in Lancaster, California.
The borrower filed for bankruptcy, and the third-party lender (TPL) foreclosed on the property. Despite the loan default, the SBA pursued the offerors for repayment. Given their limited income, lack of significant assets, and approaching retirement, we presented a strong case demonstrating their financial hardship.
Through strategic negotiations, we secured a favorable SBA settlement, reducing the nearly $1 million debt to a fraction of the amount owed. This outcome allowed the offerors to resolve their liability without prolonged financial strain.
.jpg)
