We provide borrowers with solutions to an SBA loan default and advise clients regarding solutions to SBA loan problems.
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 through all of the facets of their situations. We can create an SBA offer in compromise that can end your SBA loan problems. You should never face an SBA loan problem 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 need assistance.
The Small Business Administration's newest boss Maria Contreras-Sweet recently provided her vision for economic growth, indicating that the smallest businesses will be the mainstay of a new lending initiative.
Contreras-Sweet unveiled a new program the SBA hopes will get more smaller loans to entrepreneurs, primarily via its 7(a) program. Banks originate the loans and benefit from a federal guarantee against default of up to $5 million.
The SBA has been criticized for making too many larger loans and being less accessible to the smaller borrowers and also minorities and immigrants.
According to recent data, four out of five requests for loans from African and Hispanic Americans are for amounts of $150,000 or less, Contreras-Sweet said. With those statistics in mind, the SBA is introducing a new credit scoring system that will let banks make faster decisions on smaller financing requests, and with less paperwork involved. Moreover, the SBA hopes to increase the number of banks that lend through its guaranteed loan program.
"The time has come to reach out to all of our lending partners on small loans and bring new lenders into the SBA fold," Contreras-Sweet stated in a prepared statement.
New Model for Credit Scoring
The new credit scoring system that the SBA will use derives creditworthiness via personal and business credit.
"The SBA’s total credit score will make it easier and less time-intensive for banks to do business with the SBA," Contreras-Sweet said. "This model is cost-reducing and credit-based. It ensures that risk characteristics--not socio-economic factors--determine who is deemed creditworthy."
"By making the process quicker, cheaper, and more intutiive, these reforms will help existing lenders do more small-dollar lending," Contreras-Sweet said. The new scoring system will be available in July. SBA One will start early in 2015.
If you have a SBA loan that is in default, please contact us today for a consultation at 1-888-756-9969.
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.
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.
Clients obtained an SBA 7(a) loan for their small business in the amount of $298,000. They pledged their primary residence and personal guarantees as direct collateral for the loan. The business failed, the lender was paid the 7(a) guaranty money and the debt was assigned to the SBA. Clients received the Official 60-Day Notice giving them a couple of options to resolve the debt balance directly with the SBA before referral to Treasury's Bureau of Fiscal Service. The risk of referral to Treasury would add nearly $95,000 to the SBA principal loan balance. With the default interest rate at 7.5%, the amount of money to pay toward interest was projected at $198,600. Clients hired the Firm with only 4 days left to respond to the 60-Day due process notice. Because the clients were not eligible for an Offer in Compromise (OIC) due to the significant equity in their home and the SBA lien encumbering it, the Firm Attorneys proposed a Structured Workout to resolve the SBA debt. After back and forth negotiations, the SBA Loan Specialist assigned to the case approved the Workout terms which prevented potential foreclosure of their home, but also saved the clients approximately $294,000 over the agreed-upon Workout term with a waiver of all contractual and statutory administrative fees, collection costs, penalties, and interest.
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.
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