Protect Law Group's comprehensive services are tailored to assist businesses in resolving SBA loan default issues. Learn more today.
Book a Consultation CallWhen it comes to small business administration loans, facing the possibility of default can be a daunting prospect for any business owner. Protect Law Group understands the complexities associated with defaulting on an SBA loan within an LLC and is dedicated to assisting clients in navigating this challenging situation. Let's delve into what happens if you default on a loan in an LLC and the solutions available to you.
When an LLC defaults on an SBA loan, several key consequences may unfold:
Impact on Personal and Business Assets
One of the primary concerns when defaulting on an SBA loan in an LLC is the potential impact on both personal and business assets. SBA loans are often guaranteed by personal assets, putting them at risk in the event of a default. Protect Law Group's expertise in risk management and asset exemption protection can help mitigate these risks and safeguard your assets.
Legal Ramifications and Debt Repayment
Defaulting on an SBA loan can lead to legal actions and debt repayment obligations. Our team of Federal Agency Practitioners and SBA Attorneys is well-versed in constitutional law, contract law, and federal administrative procedures, ensuring comprehensive representation in negotiations, settlements, or even in SBA Office of Hearings & Appeals proceedings.
Exploring Debt Relief Options
Defaulting on an SBA loan does not necessarily mean the end of the road. SBA debt relief options such as deferment, SBA Offer in Compromise (SBA OIC), and bankruptcy law can provide avenues for resolving the debt burden. Protect Law Group's specialized services encompass these debt relief strategies, working towards favorable resolutions for our clients.
Protect Law Group's team of experienced attorneys understands the complexities surrounding SBA loans and stands ready to guide clients through the process of exploring and leveraging these debt relief options. Our experts are dedicated to advocating for our clients' best interests and securing the most favorable outcomes possible.
Negotiating SBA Loan Forgiveness
Despite the complexities of defaulting on an SBA loan, pursuing SBA loan forgiveness remains a viable solution. Our team excels in negotiations with creditors and the SBA, striving to achieve settlements that alleviate the financial strain on your LLC. Our expertise in commercial and banking litigation further bolsters our ability to secure favorable terms for debt restructuring.
Defaulting on an SBA loan within an LLC can pose significant challenges, but with the right legal guidance and strategic approach, navigating through this turmoil is possible. Protect Law Group's comprehensive services, spanning from financial analysis to negotiations and asset protection, are tailored to assist businesses in resolving SBA loan default issues effectively. Don't let the fear of default paralyze your business - explore the avenues of debt relief and settlement to secure a brighter financial future for your LLC.
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 for $350,000. The small business failed but because of the personal guarantee liability, the client continued to pay the monthly principal & interest out-of-pocket draining his savings. The client hired a local attorney but quickly realized that he was not familiar with SBA-backed loans or their standard operating procedures. Our firm was subsequently hired after the client received the SBA's official 60-day notice. After back-and-forth negotiations, we were able to convince the SBA to reinstate the loan, retract the acceleration of the outstanding balance, modify the original terms, and approve a structured workout reducing the interest rate from 7.75% to 0% and extending the maturity date for a longer period to make the monthly payments affordable. In conclusion, not only we were able to help the client avoid litigation and bankruptcy, but our SBA lawyers also saved him approximately $227,945 over the term of the workout.
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.
Client received the SBA's Official 60-Day Notice for a loan that was obtained by her small business in 2001. The SBA loan went into default in 2004 but after hearing nothing from the SBA lender or the SBA for 20 years, out of the blue, she received the SBA's collection due process notice which provided her with only one of four options: (1) repay the entire accelerated balance immediately; (2) negotiate a repayment arrangement; (3) challenge the legal enforceability of the debt with evidence; or (4) request an OHA hearing before a U.S. Administrative Law Judge.
Client hired the Firm to represent her with only 13 days left before the expiration deadline to respond to the SBA's Official 60-Day Notice. The Firm attorneys immediately researched the SBA's Official loan database to obtain information regarding the 7(a) loan. Thereafter, the Firm attorneys conducted legal research and asserted certain affirmative defenses challenging the legal enforceability of the debt. A written response was timely filed to the 60-Day Notice with the SBA subsequently agreeing with the client's affirmative defenses and legal arguments. As a result, the SBA rendered a decision immediately terminating collection of the debt against the client's alleged personal guarantee liability saving her $50,000.
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