We help people who need to avoid an SBA loan default by advising them about the SBA offer in compromise and about other various SBA loan problems.
Book a Consultation CallDealing with the idea that you might be facing SBA loan default can be terrifying. The SBA attorneys in our office are skilled at helping clients understand all of the facets of their situations. If, for instance, you need to know what an SBA offer in compromise is, you can simply ask your lawyer. You should never face SBA loan problems alone. It is important to retain the services of an attorney who can help you through this difficult time in your life. We urge you to read about the services that we have available and to contact us if you believe that we can be of assistance to you right now.
Many Borrowers ask the question - can I modify my note? In certain circumstances a note can be modified. With regard to 7(a) Loans sold on the secondary market, the Secondary Participation Guaranty Agreement (SBA Form 1086) prohibits any change to the repayment terms of the Note unless the guaranteed portion of the loan has been purchased by SBA or the written consent of the secondary market investor has been obtained—unless the modification involves a one-time deferment that does not exceed a continuous period of three monthly installments.
The date that regularly scheduled installment payments are due may be modified to facilitate the Borrower's ability to repay the loan or a workout. For example, payments originally scheduled to be made on a monthly basis, may be changed to a quarterly or annual basis if there is justification for the change such as the seasonal or cyclical nature of the Borrower's revenue stream.
A loan may be changed from a revolving loan to a non-revolving loan to facilitate the repayment or orderly liquidation of the loan.
The installment amount due under a Note may be modified to ensure that the loan balance is properly amortized over the remaining life of the loan, to help a viable Borrower meet long or short term goals, or to facilitate a workout.
The interest rate on the Note may be modified to help a viable Borrower meet long or short term goals, or to facilitate the recovery on a loan in liquidation status. For example, the interest rate may be modified as part of a workout agreement designed to achieve the highest possible recovery in the shortest amount of time.
Finally, the maturity date of a Note may be extended for up to 10 years beyond its original maturity date if:
a. The extension is requested before the SBA loan guaranty expires, i.e., less than 180 calendar days after the original maturity date; and
b. The extension will aid in the orderly repayment of the loan.
If you are in default on your SBA loan, please contact us at 888-756-9969 for your FREE case evaluation.
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 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.
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 obtained an SBA 7(a) loan for $324,000 to buy a small business and its facility. The business and real estate had an appraisal value of $318,000 at the time of purchase. The business ultimately failed but the participating lender abandoned the business equipment and real estate collateral even though it had valid security liens. As a result, the lender recouped nearly nothing from the pledged collateral, leaving the business owners liable for the deficiency balance. The SBA paid the lender the 7(a) guaranty money and was assigned ownership of the debt, including the right to collect. However, the clients never received the SBA Official 60-Day Notice and were denied the opportunity to negotiate an Offer in Compromise (OIC) or a Workout directly with the SBA before being transferred to Treasury's Bureau of Fiscal Service, which added an additional $80,000 in collection fees. Treasury garnished and offset the clients' wages, federal salary and social security benefits. When the clients tried to negotiate with Treasury by themselves, they were offered an unaffordable repayment plan which would have caused severe financial hardship. Clients subsequently hired the Firm to litigate an Appeals Petition before the SBA Office & Hearings Appeals (OHA) challenging the legal enforceability and amount of the debt. The Firm successfully negotiated a term OIC that was approved by the SBA Office of General Counsel, saving the clients approximately $205,000.
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