How to Refinance an SBA Loan Successfully
If your SBA loan is now making it hard to operate your business, you may want to consider refinancing. Learn more about how to refinance an SBA loan.
We will analyze your SBA loan problems and advise you on potential solutions such as an SBA offer in compromise for your SBA loan default.
Book a Free Consultation CallDealing with the idea that you might be facing an SBA loan default can be terrifying. The SBA attorneys in our office are skilled at helping clients understand all the facets of their situation. We will advise you as to the potential for an SBA offer in compromise. You should never face your 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. Please contact us for a free initial consultation.
In the event that a borrower defaults, the lender has the option to receive from SBA the face value of the outstanding guaranteed balance.9 Proceeds from the liquidation
of a firm’s assets and any subsequent recoveries are then split in proportion to the guarantee percentage. (For example, if the SBA guarantees 70 percent of the loan, it
has claim to 70 percent of recoveries.)
In the Express program, unlike regular 7(a) loans, a borrower’s assets are generally liquidated upon default and before lenders submit the loan to SBA. The lender receives all proceeds from liquidation of the borrower’s assets, and any subsequent recoveries after the lender submits the loan to SBA are split between SBA and the lender according to the guarantee percentage.
For example, assume that a borrower who has a loan with a $100,000 balance and a 50 percent guarantee defaults and that the borrower’s assets are worth $60,000. In the regular 7(a) program, the lender submits the defaulted loan to SBA and receives $50,000 (the guaranteed portion of the loan balance). When the borrower’s assets are later liquidated, the lender and SBA each receive 50 percent of the assets, or $30,000. The net loss to SBA is $20,000 (the $50,000 payment to the lender minus the $30,000 recovered from the borrower’s assets), and the net loss to the lender is also $20,000 (the $100,000 loan balance minus the $50,000 received from SBA and the $30,000 recovered from the borrower’s assets).
If the loan was made through the Express program, the lender liquidates the borrower’s assets (worth $60,000) and then submits the remaining loan balance of $40,000 to SBA. The lender then receives $20,000 (the guaranteed portion of the loan balance) from SBA. The net loss to SBA is $20,000, and the net loss to the lender is also $20,000. If an additional $1,000 is later recovered, the lender and SBA would each receive $500.
If you are facing an SBA loan default, contact us today for a FREE initial consultation at 1-888-756-9969 or contact us below:
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 an SBA 7(a) loan that was referred to the Department of Treasury for collection. Treasury claimed our clients owed over $220,000 once it added its statutory collection fees and interest. We were able to negotiate a significant reduction of the total claimed amount from $220,000 to $119,000, saving the clients over $100,000 by arguing for a waiver of the statutory 28%-30% administrative fees and costs.
Clients personally guaranteed an SBA 7(a) loan. The SBA referred the debt to the Department of Treasury, which was seeking payment of $487,981 from our clients. We initially filed a Cross-Servicing Dispute, which was denied. As a result, we filed an Appeals Petition with the SBA Office of Hearings and Appeals asserting legal defenses and supporting evidence uncovered during the discovery and investigation phase of our services. Ultimately, the SBA settled the debt for $25,000 - saving our clients approximately $462,981.
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.
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