As a small business owner, you may wonder if taking out a small business loan impacts your credit score. The answer to this question depends on a few factors. In many cases, small business loan defaults do not impact your personal credit score. However, there are a few situations where a small business loan can have an impact on your personal credit score. Protect Law Group is here to talk about knowing the right time and situation to get and not get a business loan. Get your finances handled by a team that cares by contacting us today!
There are a few situations where it's not a good idea to take out a small business loan default, even if you're confident you'll be able to make the payments. First, if your business is in a very early stage of development, it may not be wise to take out a loan. Your business may not yet have the revenue necessary to make loan payments.
In addition, if you have bad personal credit, you may not want to take out a small business loan. This is because lenders will likely view you as a high-risk borrower. As a result, you may be offered less favorable terms, such as a higher interest rate. If your business doesn't need the money immediately, it may be better to wait until your credit improves.
If you default on a small business loan, your personal credit score may be impacted. Defaulting on a small business loan can damage your personal credit score in the same way that defaulting on any other type of loan would damage your credit score. If you're considering taking out a small business loan default, make sure that you will be able to make the payments on time.
There are a few situations where it's not a good idea to take out a small business loan, even if you're confident you'll be able to make the payments. First, if your business is in a very early stage of development, it may not be wise to take out a loan. This is because your business may not yet have the revenue necessary to make loan payments.
There are a few other situations where a small business loan default may impact your personal credit score. For example, if you use a personal guarantee to secure the loan, your personal credit score may be impacted if you default on the loan. Additionally, if you take out a small business loan and use your home as collateral, your personal credit score may be impacted if you default on the loan.
At Protect Law Firm, we specialize in helping small business owners get out of small business bankruptcy and SBA loan default. Whatever your credit situation might be with your small business, we can help! Ower more than $30,000? Contact us today to learn more about how we can help you get back on track financially.
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 facilitated the SBA settlement of a COVID-19 Economic Injury Disaster Loan (EIDL) where borrower received an SBA disaster loan of $150,000, but due to the severe economic impact of the COVID-19 pandemic, the business was unable to recover.
Despite the borrower’s efforts to maintain operations, shutdowns and restrictions significantly reduced the customer base and revenue, making continued operations unsustainable. After a thorough business closure review, we negotiated with the SBA, securing a resolution where the borrower paid only $6,015 to release the collateral, with no further financial liability for the owner/officer.
This case demonstrates how businesses affected by the pandemic can navigate SBA loan settlements effectively. If your business is struggling with an SBA EIDL loan, we specialize in SBA Offer in Compromise (SBA OIC) solutions to help close outstanding debts while minimizing financial burden.
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.
Our firm successfully resolved an SBA 7(a) loan default in the amount of $212,000 on behalf of an individual guarantor. The borrower’s business experienced a significant downturn in revenue and was unable to sustain operations, ultimately leading to closure and a remaining personal guaranty obligation.
After conducting a thorough financial review and preparing a comprehensive SBA Offer in Compromise (SBA OIC) submission, we negotiated directly with the SBA and lender to achieve a settlement of $50,000—approximately 24% of the outstanding balance. This favorable resolution released the guarantor from further personal liability and provided the opportunity to move forward free from the burden of enforced collection.
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