Small business owners review possible outcomes when they are informed of an impending foreclosure. This legal action allows their lender to take possession of their property. Once the lender acquires the property, it is sold to the highest bidder. This presents the borrower with the outstanding balance. However, an SBA Offer in Compromise may prevent these circumstances.
The adverse impact of the foreclosure starts with a negative listing on the owner's credit. Foreclosure prevents them from acquiring a more beneficial loan for a new business location. It also leads to an outstanding balance listed on all three credit reports. This leads to more difficulties for the business owner. The offer in compromise reduces the impact of foreclosure.
An SBA loan foreclosure begins when the government lender issues the SBA demand letter. These loans are backed by the government and require the borrow to pay at specific value to settle the loan. This value is based on the percentage listed in the loan contract.
Tax liens present more issues and could lead to further seizure of assets. The attorney helps the business owner through a Tax Offset Program. The program provides the owner with a reduced value acquired through a settlement. The value is under fifty percent of the total value owed in most cases. Select circumstances may provide a payment plan for these tax requirements.
Owners that avoid traditional foreclosure eliminate credit issues. This helps them acquire further funding in the future when their venture becomes profitable. They may also start a new company in a new location after the settlement is paid in full. The attorney provides them with advice for restructuring their credit.
Small business owners avoid negative outcomes when they are facing foreclosure. Owners who acquire government-secured loans identify benefits of these programs through an attorney. This helps them to avoid severe damage to their credit. Small business owners who need help after an SBA loan default should contact an attorney to schedule a consultation 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 borrowed and personally guaranteed an SBA 7(a) loan. Clients defaulted on the SBA loan and were sued in federal district court for breach of contract. The SBA lender demanded the Client pledge several personal real estate properties as collateral to reinstate and secure the defaulted SBA loan. We were subsequently hired to intervene and aggressively defend the lawsuit. After several months of litigation, our attorneys negotiated a reinstatement of the SBA loan and a structured workout that did not involve any liens against the Client's personal real estate holdings.
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.
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.
.jpg)
