SBA Loan Default: What Happens if You Don't Pay?
Did you default on an SBA loan? We're telling you what happens if you don't pay and what you can do with an SBA loan default.
Learn more about SBA debt relief programs and how Protect Law Group can help with SBA repayment plan negotiations. Get in touch with us today.
Book a Consultation CallFacing overwhelming debts can be daunting for small business owners, but there is relief available through the Small Business Administration (SBA) repayment plans. In this blog post, we will explore the ins and outs of SBA repayment plans and how they can be beneficial for your business. If you are struggling with SBA debt, Protect Law Group is here to provide expert assistance. Contact us today for a case evaluation.
As a small business owner, you may find yourself burdened with substantial debt. The SBA debt relief program offers a lifeline by providing options to ease your financial strain. These programs aim to restructure your debts and make them more manageable, allowing you to regain control of your business.
Under this program, the SBA may offer relief by covering a portion of your loan repayments, reducing your interest rates, or extending the repayment period. This can significantly alleviate the burden of your debts and give you the breathing room you need to stabilize your business.
SBA repayment plans are designed to help you pay down your debts in a structured and feasible manner. These plans typically involve negotiations with the SBA or your lender to lower monthly payments or settle the debt for a reduced amount. With the experience of Protect Law Group's SBA attorneys, you can navigate these negotiations effectively, ensuring the best outcome for your business.
Opting for an SBA repayment plan offers several advantages. It allows you to avoid more severe consequences, such as bankruptcy or home foreclosure. Moreover, it provides a path towards regaining financial stability and preserving your business.
If SBA debt has become overwhelming for your small business, seek the expert guidance of Protect Law Group. Our attorneys understand the intricacies of SBA repayment plans and will work tirelessly to tailor a solution that suits your unique circumstances. Contact us today for a case evaluation and take the first step towards finding your path to business debt recovery.
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 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.
Clients obtained an SBA 7(a) loan for their small business in the amount of $298,000. They pledged their primary residence and personal guarantees as direct collateral for the loan. The business failed, the lender was paid the 7(a) guaranty money and the debt was assigned to the SBA. Clients received the Official 60-Day Notice giving them a couple of options to resolve the debt balance directly with the SBA before referral to Treasury's Bureau of Fiscal Service. The risk of referral to Treasury would add nearly $95,000 to the SBA principal loan balance. With the default interest rate at 7.5%, the amount of money to pay toward interest was projected at $198,600. Clients hired the Firm with only 4 days left to respond to the 60-Day due process notice. Because the clients were not eligible for an Offer in Compromise (OIC) due to the significant equity in their home and the SBA lien encumbering it, the Firm Attorneys proposed a Structured Workout to resolve the SBA debt. After back and forth negotiations, the SBA Loan Specialist assigned to the case approved the Workout terms which prevented potential foreclosure of their home, but also saved the clients approximately $294,000 over the agreed-upon Workout term with a waiver of all contractual and statutory administrative fees, collection costs, penalties, and interest.
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.
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