Small business owners acquire commercial loans to start their companies. These opportunities allow them to gain financing to purchase a location and merchandise needed to operate the business. When the owner can no longer manage this financial obligation, they need an SBA Offer in Compromise to avoid the negative impact of a default.
Essentially, an SBA offer in compromise is a settlement offer. The small business owner submits an application with their lender to acquire approval. The lender evaluates the financial circumstances of the business owner and identifies a value that is fair and reasonable. This value is based on a percentage of the total value owed to the lender. Upon acceptance of this value, the business owner submits the payment as specified.
An SBA loan default is the primary reason for seeking an offer in compromise. Once the loan is in default, the lender has the legal right to file a claim against the identified collateral. The collateral could include the building, machinery, and any inventory that was financed through the loan. If the borrower doesn't take action, the lender could seize the collateral and generate a major financial loss for the borrower. An SBA loan foreclosure is included in the available legal actions.
The borrower must hire an attorney to communicate with their lender. When hiring an attorney, the borrower must provide the SBA demand letter. The attorney discusses a possible settlement offer with the lender. In most cases, the lender will accept a lower value in order to settle the debt. Once it enters default, the lender may acquire a portion of the funds through an insurance settlement. When this is the case, it gives the borrower leverage over their case.
Small business owners need commercial loans to open their companies. These financing opportunities are available to any party that has a lucrative business venture. However, the mismanagement of their finances could lead to a default. When this happens, foreclosure is an almost certainty. Small business owners who need a settlement offer or to participate in 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.
Small business and guarantors obtained an SBA COVID-EIDL loan for $1,000,000. Clients defaulted causing SBA to charge-off the loan, accelerate the balance and refer the debt to Treasury's Bureau of Fiscal Service for collection. Treasury added nearly $500,000 in collection fees totaling $1,500,000. Clients were served with the SBA's Official 60-Day Notice and exercised the Repayment option by applying for the SBA’s Hardship Accommodation Plan. However, their application was summarily rejected by the SBA without providing any meaningful reasons. Clients hired the Firm to represent them against the SBA, Treasury and a Private Collection Agency. After securing government records through discovery, we filed an Appeals Petition with the SBA Office of Hearings & Appeals (OHA) court challenging the SBA's referral of the debt to Treasury. During litigation and before the OHA court issued a final Decision and Order, the Firm successfully negotiated a reinstatement and recall of the loan back to the SBA, a modification of the original repayment terms, termination of Treasury's enforced collection and removal of the statutory collection fees.
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.
Client personally guaranteed SBA 7(a) loan balance of over $150,000. Business failed and eventually shut down. SBA then pursued client for the balance. We intervened and was able to present an SBA OIC that was accepted for $30,000.
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