Small businesses facing a loan default must take immediate action. A default could provide their lender with the legal right to seize all collateral used to secure the loan. This could include the building from which their company operates. Since these loans are backed by a personal guarantee and government funding, they require specific actions through an attorney. Local attorneys could help business owners acquire a SBA Offer in Compromise to settle their debt.
The first step when the owner receives a SBA demand letter is to seek legal counsel. An attorney could provide clarity about effective strategies to prevent a complete foreclosure of their property. A foreclosure could generate a higher loss for the business owner. This could also destroy their credit and make it impossible to acquire a different property later.
The next step is to complete the paperwork for the SBA offer in compromise. These documents provide a legal request for the offer in compromise. The attorney calculates the total value in which the borrower could pay to settle the SBA loan default. These documents are filed through the court once the compromise is accepted.
The attorney could also provide assistance through a Tax Offset Program. This helps the business owner acquire a settlement offer for any overdue tax payments associated with their company. They can submit these requests at the same time as the offer in compromise request.
The borrower should work with the attorney to acquire the most effective settlement. This could include closing the doors of their business and arranging the sale of the property. This could increase their odds of acquiring acceptance. It could also improve their ability to pay.
Lenders often accept these offers when the borrower can prove that they have the ability to pay the agreed upon value. This could prevent the likelihood of a SBA loan foreclosure and secure the borrower's credit.
Small businesses acquire government-backed loans to start new ventures. Unfortunately, select ventures may become unsuccessful. This could lead to a loan default and possible foreclosure. Business owners who need help should contact an attorney who could manage an offer of compromise for them today.
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.
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.
Client personally guaranteed an SBA 7(a) loan to help with a relative’s new business venture. After the business failed, Treasury was able to secure a recurring Treasury Offset Program (TOP) levy against his monthly Social Security Benefits based on the claim that he owed over $1.2 million dollars. We initially submitted a Cross-Servicing Dispute, but then, prepared and filed an Appeals Petition with the SBA Office of Hearings and Appeals (SBA OHA). As a result of our efforts, we were able to convince the SBA to not only terminate the claimed debt of $1.2 million dollars against our client (without him having to file bankruptcy) but also refund the past recurring amounts that were offset from his Social Security Benefits in connection with the TOP levy.
.jpg)
