If you have questions about any SBA related issues, including the tax offset program, SBA loan foreclosure, or responding to an SBA demand letter, call us.
Book a Consultation CallThe attorneys in our office want to help you figure out your SBA problem. No matter how difficult your circumstances may seem, the right lawyer can assist you. We understand that you probably have questions regarding a wide range of issues, including how to respond to an SBA demand letter, what SBA loan foreclosure actually entails, and what a tax offset program is. One of our attorney specialists can tell you about all of these topics and more.
In recent SBA news, Golden Pacific Bank launched an automated nationwide program to make Small Business Administration microloans using their the Smartbizloan.com loan portal. The portal allows small businesses to apply for SBA loans as small as $5,000, which is an amount too small for most banks to consider.
The borrower fills out the online form and verifies to the lender that the bank may pull financial, tax and credit records on the company. The automated program compiles the data and grades the loan. A bank loan committee still oversees final approvals.
A loan that gets approved can be funded in days, she said. The bank is an SBA preferred lender, which means it can approve its own loans.
The loans can be as small as $5,000 and as high as $150,000 and bank officials identifying the sweet spot being under $25,000. If you are looking for a loan over $25,000 you will be required to pledge collateral. The term of the loan is 10 years, but as with all SBA loans, there is no penalty for early pre-payment.
In a pilot program since the end of last year, the SBA SmartBiz loan has funded $1 million so far through about 60 loans.
Borrowers have been across the country and in all kinds of business including loans to manufacturers of wild bird feed and yoga clothes to bookkeepers and other professionals.
The loan cannot be used to launch a business. The business seeking the loan has to have been in business with financial records for at least a year.
These mircoloans are the size of loan that many banks don’t want to make, as it takes as much time as it does to make a larger loan, and yet it offers very little income to the bank.
Many businesses that need small amounts of money end up using credit cards, but credit cards do not build up a credit profile and they are expensive.
If you have any questions about related to the Department of Treasury's tax offset program, SBA loan foreclosure, or how to respond to an SBA demand letter, please contact us at 888-756-9969 for a case evaluation.
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’s small business obtained an SBA 7(a) loan for $750,000. She and her husband signed personal guarantees exposing all of their non-exempt income and assets. With just 18 months left on the maturity date and payment on the remaining balance, the Great Recession of 2008 hit, which ultimately caused the business to fail and default on the loan terms. The 7(a) lender accelerated and sent a demand for full payment of the remaining loan balance. The SBA lender’s note allowed for a default interest rate of about 7% per year. In response to the lender's aggressive collection action, Client's husband filed for Chapter 7 bankruptcy in an attempt to protect against their personal assets. However, his bankruptcy discharge did not relieve the Client's personal guarantee liability for the SBA debt. The SBA lender opted to pursue the SBA 7(a) Guaranty and subsequently assigned the loan and the right to enforce collection against the Client to the SBA. The Client then received the SBA Official 60-Day Notice. After conducting a Case Evaluation with her, she then hired the Firm to respond and negotiate on her behalf with just 34 days left before the impending referral to Treasury. The Client wanted to dispute the SBA’s alleged debt balance as stated in the 60-Day Notice by claiming the 7(a) lender failed to liquidate business collateral in a commercially reasonable manner - which if done properly - proceeds would have paid back the entire debt balance. However, due to time constraints, waivers contained in the SBA loan instruments, including the fact the Client was not able to inspect the SBA's records for investigation purposes before the remaining deadline, Client agreed to submit a Structured Workout for the alleged balance in response to the Official 60-Day Notice as she was not eligible for an Offer in Compromise (OIC) because of equity in non-exempt income and assets. After back and forth negotiations, the SBA Loan Specialist approved the Workout proposal, reducing the Client's purported liability by nearly $142,142.27 in accrued interest, and statutory collection fees. Without the Firm's intervention and subsequent approval of the Workout proposal, the Client's debt amount (with accrued interest, Treasury's statutory collection fee and Treasury's interest based on the Current Value of Funds Rate (CVFR) would have been nearly $291,030.
Client personally guaranteed SBA 7(a) loan for $150,000. COVID-19 caused the business to fail, and the loan went into default with a balance of $133,000. Client initially hired a non-attorney consultant to negotiate an OIC. The SBA summarily rejected the ineligible OIC and the debt was referred to Treasury’sBureau of Fiscal Service for enforced collection in the debt amount of $195,000. We were hired to intervene and initiated discovery for SBA and Fiscal Service records. We were able to recall the case from Fiscal Service back to the SBA. We then negotiated a structured workout with favorable terms that saves the client approximately $198,000 over the agreed-upon workout term by waiving contractual and statutory administrative fees, collection costs, penalties, and interest.
The client personally guaranteed an SBA 504 loan balance of $375,000. Debt had been cross-referred to the 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.
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