How to Avoid Defaulting on Your SBA Loan Payment
Are you worried about getting an SBA loan because you're afraid of defaulting? Click here to learn how you can avoid defaulting on your SBA loan payment.
Business owners who face financial difficulties could also face devastating effects. These effects could lead to foreclosure of their commercial property. For these business owners, this could cause damaging effects on their credit and prevent them from starting new ventures in the future. A local attorney could help them request a SBA Offer in Compromise today.
This options allows the attorney to negotiate a settlement offer. The settlement offer is considerably lower than the total loan value. This makes it easier for the business owner to settle the debt. Since this action ensures recovery of the loan, most lenders will accept the offer based on the guarantee to pay this value in full. Business owners who wish to acquire this opportunity should take action as soon as they receive the SBA demand letter.
Before a SBA loan foreclosure, the business owner should hire an attorney. The attorney helps them to calculate a fair settlement. The value could equate to up to fifty percent of the total loan value. When this request is submitted to the lender, the borrower should provide documentation of their income to prove their ability to pay. If they choose to sale their commercial property, they could provide documentation about the sale to show their ability to pay the debt.
Business owners who are facing the effects of a loan default may also have overdue taxes. When this is the case, they also face seizure through the IRS of their assets. An attorney could also help them to enter into a Tax Offset Program. This could help them to acquire a settlement for their overdue taxes and eliminate these debts altogether. It is possible for them to acquire an installment plan to pay off overdue tax payments.
Business owners who experience financial difficulties could face defaults and foreclosure. These effects could present a damaging effect on their credit and disqualify them for more government-backed loans in the future. Business owners who are facing a SBA loan default should contact an attorney today to acquire more information about their options.
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 personally guaranteed SBA 7(a) loan balance of $58,000. The client received a notice of Intent to initiate Administrative Wage Garnishment (AWG) Proceedings. We represented the client at the hearing and successfully defeated the AWG Order based on several legal and equitable grounds.
Clients executed personal and corporate guarantees for an SBA 7(a) loan from a Preferred Lender Provider (PLP). The borrower corporation defaulted on the loan exposing all collateral pledged by the Clients. The SBA subsequently acquired the loan balance from the PLP, including the right to collect against all guarantors. The SBA sent the Official Pre-Referral Notice to the guarantors giving them sixty (60) days to either pay the outstanding balance in full, negotiate a Repayment (Offer in Compromise (OIC) or Structured Workout (SW)), challenge their alleged guarantor liability or file a Request for Hearing (Appeals Petition) with the SBA Office of Hearings & Appeals.
Because the Clients were not financially eligible for an OIC, they opted for Structured Workout negotiations directly with the SBA before the debt was transferred to the Bureau of Fiscal Service, a division of the U.S. Department of Treasury for enforced collection.
The Firm was hired to negotiate a global Workout Agreement directly with the SBA to resolve the personal and corporate guarantees. After submitting the Structured Workout proposal, the assigned SBA Loan Specialist approved the requested terms in under ten (10) days without any lengthy back and forth negotiations.
The favorable terms of the Workout included an extended maturity at an affordable principal amount, along with a significantly reduced interest rate saving the Clients approximately $181,000 in administrative fees, penalties and interest (contract interest rate and Current Value of Funds Rate (CVFR)) as authorized by 31 U.S.C. § 3717(e) had the SBA loan been transferred to BFS.
Clients obtained an SBA 7(a) loan for $324,000 to buy a small business and its facility. The business and real estate had an appraisal value of $318,000 at the time of purchase. The business ultimately failed but the participating lender abandoned the business equipment and real estate collateral even though it had valid security liens. As a result, the lender recouped nearly nothing from the pledged collateral, leaving the business owners liable for the deficiency balance. The SBA paid the lender the 7(a) guaranty money and was assigned ownership of the debt, including the right to collect. However, the clients never received the SBA Official 60-Day Notice and were denied the opportunity to negotiate an Offer in Compromise (OIC) or a Workout directly with the SBA before being transferred to Treasury's Bureau of Fiscal Service, which added an additional $80,000 in collection fees. Treasury garnished and offset the clients' wages, federal salary and social security benefits. When the clients tried to negotiate with Treasury by themselves, they were offered an unaffordable repayment plan which would have caused severe financial hardship. Clients subsequently hired the Firm to litigate an Appeals Petition before the SBA Office & Hearings Appeals (OHA) challenging the legal enforceability and amount of the debt. The Firm successfully negotiated a term OIC that was approved by the SBA Office of General Counsel, saving the clients approximately $205,000.
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