SBA Loan Default: Bad Times Ahead for SBA Lending?
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.
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.
The clients are 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 $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 borrowed and personally guaranteed an SBA 7(a) 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.
.jpg)
