Local attorneys help business owners when they are facing a possible default on their loans. When defaulting, this indicates that the lender has the legal right to start the foreclosure process. This process allows them to take possession of the property used as collateral and sell it at auction. A SBA Offer in Compromise is an opportunity to prevent the lender from taking these steps.
The small business owner receives a SBA demand letter once they have defaulted on their loan. The default indicates that the loan is at least ninety-days delinquent. It also allows the lender to acquire full payment of the loan. Once the borrower has acquired a SBA loan default, they should approach an attorney. The attorney could help them find a more reasonable solution instead of foreclosure.
The attorney discusses the possibilities with the lender. Together they determine the most fair and reasonable percentage to settle the loan default. This percentage could be as much as fifty percent of the total value required. By submitting this offer to the lender, the borrower could keep their business operating and reduce the financial impact of settling the debt.
The attorney prepares the documentation for the offer. They submit the documents to the lender. Upon acceptance, the lender provides the borrower with the correct documents for finalizing this process. Once the offer is accepted the SBA loan foreclosure stops.
However, if the property was used as collateral to secure the loan the lender may collect it as well. The attorney should review the terms of the settlement with the borrower to identify any clauses that affect ownership of the property. If possible, the attorney may negotiate a settlement that allows the business owner to keep the property based on how much equity they have accumulated.
Local attorneys could help small business owners avoid foreclosure through a settlement offer. This offer helps them to prevent major damage to the business owner's credit. It could also help the business owner avoid the requirement of paying the full outstanding balance of the loan. Business owners who need to acquire help with a default or need a Tax Offset Program should contact an attorney now.
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.
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.
Our firm successfully resolved an SBA 7(a) loan default in the amount of $212,000 on behalf of an individual guarantor. The borrower’s business experienced a significant downturn in revenue and was unable to sustain operations, ultimately leading to closure and a remaining personal guaranty obligation.
After conducting a thorough financial review and preparing a comprehensive SBA Offer in Compromise (SBA OIC) submission, we negotiated directly with the SBA and lender to achieve a settlement of $50,000—approximately 24% of the outstanding balance. This favorable resolution released the guarantor from further personal liability and provided the opportunity to move forward free from the burden of enforced collection.
Our firm successfully resolved an SBA 7(a) loan default in the amount of $140,000 on behalf of a husband-and-wife guarantor pair. The business had closed following a prolonged decline in revenue, leaving the borrowers personally liable for the remaining balance.
After conducting a comprehensive financial analysis and preparing a detailed SBA Offer in Compromise (SBA OIC) package, we negotiated directly with the SBA and the lender to achieve a settlement for $70,000 — just 50% of the outstanding balance. This settlement released the borrowers from further personal liability and allowed them to move forward without the threat of enforced collection.
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