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Having a business attorney is definitely a great idea when the time comes, but when is that time? Check out this article to find out when is the perfect time you should consider hiring a small business attorney now!
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Wondering if your company needs a small business attorney? Then you need this guide.
As a small business, you can't afford to keep an attorney available at all times. But when you need legal help, you don't want to get stuck in a situation where you don't have the attorney you need available. When is it the right time to hire a business lawyer?
In this guide, we'll clear up the confusion. Keep reading to find out how to tell when it's time to hire a lawyer!
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A small business lawyer can be an expensive investment. You might be wondering if you really need one at all.
Most small businesses will need a small business attorney at some point. But there are a few types of businesses that can succeed without ever needing legal guidance, too. Let's take a look at some of the cases when you might not need a small business lawyer at all.
If your small business exists as a hobby, and not as a money-making venture, legal help probably isn't for you.
Hobby businesses aren't serious businesses that are meant to grow and become profitable. However, many people with "hobby businesses" may not realize that that's what they're doing. They might have a dream of making lots of money but aren't putting in the time or effort to make it happen.
Sometimes, your business is simply a pricey hobby. It's okay to run a business that doesn't make a profit if it's something you enjoy. After all, you can still call yourself an entrepreneur either way! And the good news is that you won't need a lawyer for this kind of business.
Needless to say, there's a great deal of overlap between a hobby business and a company that's not making any money. You might even be losing money as you pursue your business. If your company isn't making money, it's not realistic to hire a lawyer, and you probably don't need one anyway.
One of the main reasons you might need a small business lawyer is to protect your intellectual property, such as your company name. But if your company has a generic name, like "Joe's Electronics," there isn't any intellectual property to protect.
You can't trademark a name that's too generic, so you shouldn't waste your money on a lawyer whose protection you don't need.
Finally, you might be among the minority of business owners who feels capable of handling your own legal tasks. Most of the time, this isn't the best idea. But if you have a legal background, you might feel that you can get by without a lawyer.
For the vast majority of small businesses, the above scenarios don't apply. Most businesses should hire a small business attorney - but it's all about hiring one at the right time. Let's take a look at some of the signs that it's time to get a lawyer on the phone.
If you have plans to grow your company in a major way, you should start talking to a lawyer as soon as possible.
"A major way" means you're planning to make revolutionary changes in your industry, or you want a brand that will go national or even global. If you're planning on having a major impact or major revenue, you'll need a solid legal team on board for the process.
Outside funding can take a number of different forms, from private investors to structured debt
No matter what, you'll be working with complicated securities laws when you start considering outside funding. You might be dealing with both federal and state regulations, and if you violate the laws, there are criminal penalties.
You don't want to pay thousands of dollars of fines, or worse, have to do jail time. Make sure you talk to a business lawyer so you can approach this situation without issues.
If your business doesn't have a generic name like those discussed above, you'll need to protect it. Your brand is innovative or unique - make sure other people can't steal from you.
A lawyer who knows small business and intellectual property laws will be able to help you protect your brand's name and identity from competitors.
The exact number depends on your business. But if you're making a fairly high gross revenue each month - let's say measured in tens of thousands, not just thousands - you should have a lawyer.
Your business is pulling in significant amounts of cash. Even if you have high expenses, there should still be some profit left to work with. An attorney can help you avoid potentially expensive legal issues. If you have enough money coming in to afford a lawyer, get one.
If you're quickly opening up multiple brands, you're probably looking to generate a lot of revenue in the near future. Why waste your energy doing the legal work that it takes to open different brands at the same time? Hiring a lawyer will quickly pay off in this situation.
If you wait to hire a lawyer until you've run into legal trouble, it's too late. As long as you can afford a small business attorney, the sooner you hire one the better.
Speaking to a lawyer will help you avoid foreseeable problems and keep your business healthy and legal.
If your business has defaulted on its SBA loan, it is time to contact an experienced SBA workout attorney to deal with your SBA loan. Not only is the business liable for the debt, but you, as the personal guarantor, are also liable. With the bank and the SBA coming after you for the SBA debt, it is time to retain an SBA attorney.
We can help. Click here to learn more about our SBA services.
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 an SBA 7(a) loan for $100,000 from the lender. The SBA loan went into early default in 2006 less than 12 months from disbursement. The SBA paid the 7(a) guaranty monies to the lender and subsequently acquired the deficiency balance of about $96,000, including the right to collect against the guarantor. However, the SBA sent the Official 60-Day Due Process Notice to the Client's defunct business address instead of his personal residence, which he never received. As a result, the debt was transferred to Treasury's Bureau of Fiscal Service where substantial collection fees were assessed, including accrued interest per the promissory note. Treasury eventually referred the debt to a Private Collection Agency (PCA) - Pioneer Credit Recovery, Inc. Pioneer sent a demand letter claiming a debt balance of almost $310,000 - a shocking 223% increase from the original loan amount assigned to the SBA. Client's social security disability benefits were seized through the Treasury Offset Program (TOP). Client hired the Firm to represent him as the debt continued to snowball despite seizure of his social security benefits and federal tax refunds as the involuntary payments were first applied to Treasury's collection fees, then to accrued interest with minimal allocation to the SBA principal balance.
We initially submitted a Cross-Servicing Dispute (CSD) challenging the referral of the debt to Treasury based on the defective notice sent to the defunct business address. Despite overwhelming evidence proving a violation of the Client's Due Process rights, the SBA still rejected the CSD. As a result, an Appeals Petition was filed with the SBA Office of Hearings & Appeals (OHA) Court challenging the SBA decision and its certification the debt was legally enforceable in the amount claimed. After several months of litigation before the SBA OHA Court, our Firm Attorney successfully negotiated an Offer in Compromise (OIC) Term Workout with the SBA Supervising Trial Attorney for $82,000 spread over a term of 74 months at a significantly reduced interest rate saving the Client an estimated $241,000 in Treasury collection fees, accrued interest (contract interest rate and Current Value of Funds Rate (CVFR)), and the PCA contingency fee.
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.
Small business sole proprietor obtained an SBA COVID-EIDL loan for $500,000. Client defaulted causing SBA to charge-off the loan, accelerate the balance and refer the debt to Treasury's Bureau of Fiscal Service for aggressive collection. Treasury added $180,000 in collection fees totaling $680,000+. Client tried to negotiate with Treasury but was only offered a 3-year or 10-year repayment plan. Client hired the Firm to represent before the SBA, Treasury and a Private Collection Agency. After securing government records through discovery and reviewing them, we filed an Appeals Petition with the SBA Office of Hearings & Appeals (OHA) court challenging the SBA's referral of the debt to Treasury citing a host of purported violations. The Firm was able to negotiate a reinstatement and recall of the loan back to the SBA, participation in the Hardship Accommodation Plan, termination of Treasury's enforced collection and removal of the statutory collection fees.
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