SBA Workouts: Option To SBA OIC To Settle SBA Debt
Dealing with an SBA OIC case can be hard. This is why you should allow our lawyers to settle SBA debt for you. Contact us about your SBA loan default.
One of the consequences of a failing small business is SBA loan default. The owner ends up with the debt of the small business association (SBA) loan. There are a few avenues to take, once a SBA demand letter has been received. The first thing a failed business owner needs to do is hire a federally licensed SBA attorney and Treasury debt practitioner. That specialization means the attorney can handle a case once it has been referred to the Treasury. Non-legal entities cannot provide negotiation services from that point forward.
An SBA Offer in Compromise is one way to settle the debt without foreclosure or filing bankruptcy. A case evaluation by the attorney will determine if owners are eligible for this option. The Offer in Compromise (OIC) is available when a business has failed due to mismanagement of finances. The basic requirements are that the business is no longer operational, and assets have already been liquidated. A negotiation can reduce the debt by as much as eighty percent. Lenders prefer to settle for a one lump sum, but payments can be made in installments under certain circumstances.
Another avenue is a Tax Offset Program in which the lender seizes the tax returns of the failed business owner every year, until the balance of the loan is paid off. That seems extreme, but can save the owner from a SBA loan foreclosure. In a foreclosure, the lender seizes any property listed on the loan documentation. If the value of the property does not cover the debt, the borrower's home could be seized, if it was purchased with company funds. That is a substantial risk to to take.
Negotiations cannot begin until a letter is received, which is usually ninety days after the last loan payment was made. From that point, collection efforts will be fast and aggressive. Business assets, including bank accounts and property, can be seized immediately. It is wise not to wait that long to contact an attorney. Getting help as soon as the business fails allows time for the attorney to review the case, explain possible options, answer any questions, and let the owner know what to expect.
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 $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.
The client personally guaranteed an SBA 504 loan balance of $375,000. Debt had been cross-referred to the Treasury at the time we got involved with the case. We successfully had debt recalled to the SBA where we then presented an SBA OIC that was accepted for $58,000.
Clients personally guaranteed an SBA 504 loan balance of $337,000. The Third Party Lender had obtained a Judgment against the clients. We represented clients before the SBA and negotiated an SBA OIC that was accepted for $30,000.
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