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Who Qualifies for an SBA Loan Deferment
Learn who qualifies for an SBA loan deferment as well as when. Your frequently asked questions answered in one handy guide.
As a responsible party (stemming from an SBA Note or SBA Unconditional Guarantee) for an SBA loan default or SBA debt that has been transferred to the Treasury’s Bureau of Fiscal Service, you may want to consider challenging your liability for the alleged debt by investigating whether the original seller of the small business that you purchased (through an SBA-guaranteed loan) may have engaged in fraud or misrepresentation in the sale and purchase of the subject small business based on inflated or fraudulent financials.
Case in Point: U.S. v. Rood
Todd E. Rood was the owner of Rood Machine & Engineering when he falsified documents in 2015 and 2016 to make his business look more attractive than it actually was. By altering his business’s bookkeeping records, Rood inflated its income by approximately $583,827 and lowered its liabilities by reclassifying them.
Rood, who pleaded guilty to SBA loan application fraud, admitted making false statements to the buyers’ bank in order to defraud the buyers and their financial institution – which was a participating SBA lender. The loss to the SBA lender and the small business buyers amounted to approximately $1,347,608.
Rood’s company was purchased for $2.05 million based on the fraudulent financial documents. A $1.74 million loan used to purchase the small business was guaranteed by the Small Business Administration (SBA).
According to court documents, the buyers of Rood’s small business also undertook a "quick sale" of their home in order to buy Rood Machine & Engineering on the timetable set forth by Rood, who falsely claimed to have terminal colon cancer. The buyers incurred a loss of $40,000 on their home as a result.
Under the terms of his plea agreement, Rood must pay the company's buyers $262,000 in restitution for their closing costs as well as a required cash infusion into the business.
Rood was sentenced to four years in a federal prison without parole. Rood also has been ordered by the federal court to pay $1,347,608 in restitution and a money judgment to the government of $1,207,979, which covers his profit from the sale.
To view a copy of Rood’s Plea Agreement, click here
If you are facing an SBA loan default involving an SBA Unconditional Guarantee or a Treasury/Bureau of Fiscal Service debt problem, contact us today for a FREE initial consultation with an experienced SBA or Treasury workout attorney at 1-888-756-9969
We can analyze your SBA loan, Treasury/BFS debt or Private Collection Agency problem and advise you on a range of potential solutions.
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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
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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 $337,000. The Third Party Lender had obtained a Judgment against the clients. We represented clients before the SBA and negotiated an SBA OIC that was accepted for $30,000.
Clients borrowed and personally guaranteed an SBA 7a loan. Clients defaulted on the SBA loan and were sued in federal district court for breach of contract. The SBA lender demanded the Client pledge several personal real estate properties as collateral to reinstate and secure the defaulted SBA loan. We were subsequently hired to intervene and aggressively defend the lawsuit. After several months of litigation, our attorneys negotiated a reinstatement of the SBA loan and a structured workout that did not involve any liens against the Client's personal real estate holdings.
Client personally guaranteed an SBA 7(a) loan to help with a relative’s new business venture. After the business failed, Treasury was able to secure a recurring Treasury Offset Program (TOP) levy against our client’s monthly Social Security Benefits based on the claim that he owed over $1.2 million dollars. We initially submitted a Cross-Servicing Dispute, but then, prepared and filed an Appeals Petition with the SBA Office of Hearings and Appeals (SBA OHA). As a result of our efforts, we were able to convince the SBA to not only terminate the claimed debt of $1.2 million dollars against our client (without him having to file bankruptcy), but also refund the past recurring amounts that were offset from his Social Security Benefits in connection with the TOP levy.
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