How Can I Get an SBA Loan Deferment?
Are you straining with your SBA loan repayment and you are opting to defer the loan. Read this article to know how you can get an SBA loan deferment.
Defaulted SBA Loan Offer in Compromise? Answers to questions by borrowers in SBA default considering submitting a fully compliant Offer in Compromise.
Book a Consultation CallThe Small Business Administration provides loans for entrepreneurs to start smaller business ventures. These loans are guaranteed by the government and require the business owner to pay them back according to the schedule set up. When the business owner faces financial difficulties, they may not have the funds needed to repay the loan. This could result in a default. When this happens, an SBA Loan Offer in Compromise could prevent the company from facing financial ruin.
Essentially, the offer in compromise is a settlement offer submitted by a financial advisor or attorney. It reflects are reduced value in which the business owner could pay their lender to settle the debt. An SBA loan default requires action on the borrower's part to avoid unwanted circumstances. This compromise is an effective strategy to prevent these circumstances and prevent a larger financial loss for the owner.
The owner should utilize an offer in compromise as soon as they receive the SBA demand letter. This letter is the last step of the notification process before the SBA takes further legal action. These actions could include seizure of property and assets. They could place a lien against the borrower's checking account, savings account, and all property in their name. These measures are taken to acquire payment of the total balance plus any late fees that accumulated.
Through an SBA loan foreclosure, the lender could seize the borrower's primary residence. This could occur if the property is used as collateral or included in the properties owned by the business. If properties and assets that are business-related could be used to pay off the loan, the primary residence isn't in jeopardy. However, the consumer may need an attorney to fight against these actions.
Small business owners must take quick action if their loan defaults. These actions could lead to a domino effect in which they lose all their property and assets. An attorney could help them by finding a better solution to this problem. Business owners who need assistance with a compromise or Tax Offset Program should contact an attorney immediately.
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 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.
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' 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.
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