Economic Injury Disaster Loans: Can I Compromise an EIDL Loan?
Can you compromise on economic injury disaster loans? Click here to find out what you need to know about EIDL loans and your options.
Protect Law Group is committed to resolving your SBA loan default problems. Our experienced attorneys can help you through the SBA loan default process with an SBA offer in compromise, administrative wage garnishment defense, or other SBA loan forgiveness processes.
SBA head, Maria Contreras-Sweet, issued her final report as she will be replaced with the new Trump administration. You can down load the report here: sba-exit-memo
Contreras-Sweet noted that early in the financial crisis crisis, SBA fought to protect small businesses from the worst of the downturn. As the economy rebounded, SBA worked to ensure that small businesses continued to share in that recovery. She noted that the SBA focused on four areas:
1. Improving access to capital by modernizing our programs and systems.
2. Expanding opportunities for entrepreneurs from every corner of our nation.
3. Improving support structures for entrepreneurs and catalyzing high-growth, high-impact startups.
4. Broadening access to global markets through exporting.
Since 2009, Contreras-Sweet noted, the SBA guaranteed $179 billion in small business loans, more than any other administration in history. Annual SBA lending in the largest programs was up more than 160 percent since the depths of the recession according to the memo.
The number of SBA loan defaults spiked during the recession, however. In 2004 the default rate was 2.4% but rocketed to nearly 12% by 2009. Former business owner continue to feel the pressure of SBA loan defaults, which occurred during the recession. No statute of limitations exists as to the government's ability to collect on SBA loan defaults and, therefore, even a default that occurred in 2009, for example, remains subject to government collection.
The incoming SBA administrator will face better economic conditions going forward but the results of the recession on SBA loan guarantors will continue.
If you are facing an SBA loan default, contact us at 1-888-756-9969 for a FREE initial consultation. Protect Law Group has helped debtors throughout the United States settle their SBA debt.
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.
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.
Client personally guaranteed SBA 7(a) loan balance of over $150,000. Business failed and eventually shut down. SBA then pursued client for the balance. We intervened and was able to present an SBA OIC that was accepted for $30,000.
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