We provide people who are facing an SBA loan default with solutions. We analyze SBA loan problems and provide solutions such as an SBA offer in compromise.
Book a 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.
According to the Wall Street Journal, Quiznos, Cold Stone Creamery, Planet Beach Franchising and Huntington Learning Centers Inc. ranked among the 10 worst franchise brands in terms of Small Business Administration loan defaults.
The 10 worst performing franchisees saw their SBA loans defaulted on at a rate more than twice as high as SBA borrowers of all other chains in the past decade.
In other terms, the top 10 worst performing brands have contributed to 21% of all franchise-loan charge-offs by the SBA.
The 7(a) loan-guarantee program is the SBA's most popular loan program by far. It was set up six decades ago to help borrowers who can't qualify for traditional loans obtain funding to start or expand franchises and other small businesses.
Based on the Journal's analysis, charge-offs on SBA 7(a) loans have been declining. Last year, 8,100 such loans were charged off for a total of $705 million, down from nearly $2 billion charged off in 2010.
Quiznos franchisees charged off more money than any other franchise during the past decade. Its franchisees accumulated $38 million in unpaid loans and had a default rate of 30% from 2004 through 2013. The franchisor filed for bankruptcy in March of this year.
Others, such as Planet Beach Franchising Corp., said that franchisees were hurt by the 10% tax the feds placed on tanning services in 2010 to help pay for ObamaCare. The Journal determined that Planet Beach franchisees has a 41% default rate.
Who were the best performers in the ranking? They included Jimmy John's, Little Caesar's Pizza and Days Inn, which all had default rates of 2% or less.
Below is the list of worst performing franchises, according to the Wall St. Journal:
If you are facing an SBA loan default, call our offices at 1-888-756-9969 for a FREE initial consultation.
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.
Our firm successfully resolved an SBA COVID-19 Economic Injury Disaster Loan (EIDL) in the original amount of $150,000 for a Florida-based borrower. The loan, issued on June 4, 2020, was secured by business assets and potential personal liability through the SBA's Security Agreement.
Following the permanent closure of the business, we guided the client through the SBA’s Business Closure Review process and prepared a comprehensive collateral analysis. We negotiated directly with the SBA, obtaining a full release of the business collateral for $2,910 — satisfying the borrower’s obligations under the Security Agreement and eliminating any further enforcement risk against the pledged assets.
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.
Our firm successfully negotiated an SBA offer in compromise (SBA OIC), settling a $974,535.93 SBA loan balance for just $18,000. The offerors, personal guarantors on an SBA 7(a) loan, originally obtained financing to purchase a commercial building in Lancaster, California.
The borrower filed for bankruptcy, and the third-party lender (TPL) foreclosed on the property. Despite the loan default, the SBA pursued the offerors for repayment. Given their limited income, lack of significant assets, and approaching retirement, we presented a strong case demonstrating their financial hardship.
Through strategic negotiations, we secured a favorable SBA settlement, reducing the nearly $1 million debt to a fraction of the amount owed. This outcome allowed the offerors to resolve their liability without prolonged financial strain.
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