SBA Loan Default: Is Your Loan Substandard?
We provide borrowers facing an SBA loan default with solutions. We identify your SBA loan problems and provide solutions, like an SBA offer in compromise.
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.
Clients executed several trust deeds pledging seven (7) real estate properties and unconditional personal guarantees for an SBA 7(a) loan from the participating lender. The clients' small business failed and eventually defaulted on repayment of the loan exposing all collateral pledged by the clients. The SBA subsequently acquired the loan balance from the lender, including the right to liquidate and collect all pledged collateral pursuant to the trust deed instruments.
The Firm was hired to negotiate separate release of lien proposals for all 7 real estate properties. In preparation for the work assignment, the Firm Attorneys initiated discovery to secure records from the SBA and Treasury's Bureau of Fiscal Service. After reviewing the records and understanding the interplay between the lender and the SBA, the attorneys then prepared, submitted and negotiated the release of lien (ROL) for each of the 7 real estate properties for consideration.
After submitting the proposals, the assigned SBA Loan Specialists approved each ROL package - significantly reducing the total SBA debt claimed.
The client personally guaranteed an SBA 7(a) loan for $150,000. His business revenue decreased significantly causing default and an accelerated balance of $143,000. The client received the SBA's Official 60-day notice with the debt scheduled for referral to the Treasury’s Bureau of Fiscal Service for aggressive collection in less than 26 days. We were hired to represent him, respond to the SBA's Official 60-day notice, and prevent enforced collection by the Treasury and the Department of Justice. We successfully negotiated a structured workout with an extended maturity date that included a reduction of the 14% interest rate and removal of substantial collection fees (30% of the loan balance), effectively saving the client over $242,000.
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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