SBA Plan for Economic Growth, Fewer Instances of SBA Loan Default
We provide borrowers with solutions to an SBA loan default and advise clients regarding solutions to SBA loan problems.
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 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 consultation.
Patrick Clark of www.BloombergBusiness.com recently wrote an article critical of SBA lending to franchises based on a report by the Service Employees International Union, the labor group that’s been fighting to raise pay for fast-food workers. Clark notes that default rates for franchises hovers around 20%.
Clark writes "John Reynolds, president of the International Franchise Association Educational Foundation, says the union was “cherry-picking” data, and that the focus should be on the tens of thousands of franchisees who used SBA loans to successfully expand their businesses and add jobs to the U.S. economy. “I think [the SEIU] have an agenda that’s focused around casting doubt or criticism on the fundamentals of the franchise model..."
Based on Protect Law Group's research and analysis, a 20% failure rate seems accurate. It has been well documented that certain franchises, such as Quiznos, have extremely high default rates. In our discussions with SBA lenders, a franchise is often a very rough road. For a small operator 80 hour weeks for $50,000 per year is a common life for a franchise owner of even a trusted brand such as Subway. The franchise fees, costs of buying supplies from franchisors, and lack of freedom often hamstring small franchisees. Larger franchisees who can operate multiple stores are often more successful.
Protect Law Group has helped dozens of failed franchisees settle their SBA related debt. We provide an in depth study of a particular franchise's default rates, the reason why and apply those facts and analysis to help our clients obtain a satisfactory compromise with the SBA.
You can read the complete article here.
If you are facing an SBA loan default, contact us today for a consultation with an experienced SBA workout attorney at 888-756-9969.
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.
Client received the SBA's Official 60-Day Notice for a loan that was obtained by her small business in 2001. The SBA loan went into default in 2004 but after hearing nothing from the SBA lender or the SBA for 20 years, out of the blue, she received the SBA's collection due process notice which provided her with only one of four options: (1) repay the entire accelerated balance immediately; (2) negotiate a repayment arrangement; (3) challenge the legal enforceability of the debt with evidence; or (4) request an OHA hearing before a U.S. Administrative Law Judge.
Client hired the Firm to represent her with only 13 days left before the expiration deadline to respond to the SBA's Official 60-Day Notice. The Firm attorneys immediately researched the SBA's Official loan database to obtain information regarding the 7(a) loan. Thereafter, the Firm attorneys conducted legal research and asserted certain affirmative defenses challenging the legal enforceability of the debt. A written response was timely filed to the 60-Day Notice with the SBA subsequently agreeing with the client's affirmative defenses and legal arguments. As a result, the SBA rendered a decision immediately terminating collection of the debt against the client's alleged personal guarantee liability saving her $50,000.
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.
Our firm successfully assisted a client in closing an SBA Disaster Loan tied to a COVID-19 Economic Injury Disaster Loan (EIDL). The borrower obtained an EIDL loan of $153,800, but due to the prolonged economic impact of the COVID-19 pandemic, the business was unable to recover and ultimately closed.
As part of the business closure review and audit, we worked closely with the SBA to negotiate a resolution. The borrower was required to pay only $1,625 to release the remaining collateral, effectively closing the matter without further financial liability for the owner/officer.
This case highlights the importance of strategic negotiations when dealing with SBA settlements, particularly for businesses that have shut down due to unforeseen economic challenges. If you or your business are struggling with SBA loan debt, we focus on SBA Offer in Compromise (SBA OIC) solutions to help settle outstanding obligations efficiently.
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