If you Owe more than $30,000 contact us for a case evaluation at (833) 428-0937
contact us for a free case evaluation at (833) 428-0937
Call us (833) 428-0937

SBA Loan Default: Is Your Loan Substandard?

We provide borrowers facing an SBA loan default with solutions. We identify your SBA loan problems and provide solutions, like an SBA offer in compromise.

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SBA Loan Default: Is Your Loan Substandard?

We provide individuals who are facing an SBA loan default with solutions. We will help you understand different SBA loan problems and will provide you with solutions such as an SBA offer in compromise.

Dealing 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.

Your may be in danger of defaulting on your SBA loan when certain warning signs arise.  The SBA will be looking at a checklist of items to determine if loan will be classified as "substandard".

Early financial warning signs include:

Balance Sheet

  • Failure to submit financial statements in a timely fashion
  • Slowdown in the collection period for receivables
  • Deterioration in customer’s cash position
  • Share increases in dollar amounts or percentage of accounts receivable
  • Share increases in dollar amounts or percentage of inventory
  • Slowdown in inventory turnover
  • Decline in current assets as a percentage of total assets
  • Deterioration of the liquidity/working capital position Marked changes in mix of trading assets
  • Rapidly changing concentrations in fixed assets
  • Large increase in reverses
  • Concentrations in noncurrent assets, other than fixed assets
  • High concentration of assets in intangibles
  • Disproportionate increases in current debt Substantial increases in long-term debt
  • Low equity relative to debt
  • Significant changes in the structure of balance sheet
  • Presence of debt due to/from officer/shareholders
  • Qualified audit
  • Change of accountants

Income Statement

  • Declining sales/rapidly expanding sales
  • Major gap between gross and net sales
  • Rising cost percentages/narrowing margins
  • Rising sales and falling profits
  • Rising levels of bad debt losses
  • Disproportionate increases in overhead, relative to sales
  • Rising levels of total assets, relative to sales/profits
  • Operating losses

Receivables Aging

  • Extended average age of receivables
  • Changes in credit policies
  • Extended terms
  • Replacement of accounts receivable with notes receivable
  • Concentrations of sales
  • Compromise of accounts receivable
  • Receivables from affiliated companies

Early Management Warning Signals

  • Change in behavior/personal habits of key people
  • Marital problems
  • Change in attitude toward bank or banker, especially a seeming lack of cooperation
  • Failure to perform personal obligations
  • Changes in management, ownership, or key personnel
  • Illness or death of key personnel
  • Inability to meet commitments on schedule
  • Recurrence of problems presumed to have been solved
  • Inability to plan
  • Poor financial reporting and controls
  • Fragmented functions
  • Venturing into acquisitions, new business, new geographic area, or new product line
  • Desire and insistence to take business gambles and undue risk
  • Unrealistic pricing of goods and services
  • Neglect or discontinuance of profitable standard lines
  • Delay in reacting to declining markets or economic conditions
  • Lack of visible management succession
  • One-person operations showing growth patterns that strain the capacity of the owner to manage and control
  • Change in business, economy, or industry
  • Labor problems
  • Change in the nature of the company’s business
  • Poor financial records and operating controls
  • Inefficient layout of plant and equipment
  • Poor use of people
  • Loss of key product lines, franchises, distribution rights, or sources

    of supply
  • Loss of one or more major, financially secure customers
  • Substantial jumps in size of single orders or contracts that would

    strain existing productive capacity
  • Speculative inventory purchases that are out of line with normal purchasing practices
  • Poor maintenance of plant and equipment
  • Deferred replacement of outmoded or inefficient equipment
  • Evidence of stale inventory, large levels of inventory, or inappropriate mix of inventory

Contact us today at 1-888-756-9969 for a FREE case evaluation.

Why Hire Us to Help You with Your Treasury or SBA Debt Problems?

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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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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

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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.

$375,000 SBA 504 LOAN - SBA OIC CASH SETTLEMENT

$375,000 SBA 504 LOAN - SBA OIC CASH SETTLEMENT

Client personally guaranteed SBA 504 loan balance of $375,000.  Debt had been cross-referred to Treasury at the time we got involved with the case.  We successfully had debt recalled to the SBA where we then presented an SBA OIC that was accepted for $58,000.

$150,000 SBA 7A LOAN - SBA OIC CASH SETTLEMENT

$150,000 SBA 7A LOAN - SBA OIC CASH SETTLEMENT

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.

$350,000 SBA 7A LOAN - NEGOTIATED STRUCTURED WORKOUT AGREEMENT

$350,000 SBA 7A LOAN - NEGOTIATED STRUCTURED WORKOUT AGREEMENT

Client personally guaranteed SBA 7(a) loan for $350,000. The small business failed but because of the personal guarantee liability, the client continued to pay the monthly principal & interest out-of-pocket draining his savings. Client hired a local attorney but quickly realized that he was not familiar with SBA-backed loans or their standard operating procedures. Our firm was subsequently hired after the client received the SBA's official 60-day notice. After back-and-forth negotiations, we were able to convince the SBA to reinstate the loan, retract the acceleration of the outstanding balance, modify the original terms, and approve a structured workout reducing the interest rate from 7.75% to 0% and extending the maturity date for a longer period to make the monthly payments affordable. In conclusion, not only we were able to help the client avoid litigation and bankruptcy, but we also save him approximately $227,945 over the term of the workout.

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