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.
Clients personally guaranteed an SBA 504 loan balance of $337,000. The Third Party Lender had obtained a Judgment against the clients. We represented clients before the SBA and negotiated an SBA OIC that was accepted for $30,000.
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.
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.
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