SBA Liquidation Protocols
Article about SBA Liquidation Standard Operating Procotols, SBA liquidation procedures, grounds for appealing violations of SBA SOPs to the SBA Office of Hearings and Appeals
The SBA Office of Inspector General (OIG) recently issued an Alert regarding SBA EIDL Loans and the potential warning signs involving COVID-19 fraud and abuse. This video article is an exact reproduction of the SBA OIG’s Notice of Alert that was published on 7/14/2020.
The Small Business Administration’s (SBA’s) Economic Injury Disaster Loan program is part of the nation’s response to the Coronavirus 2019 (COVID-19) pandemic under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). These economic injury loans are intended to help eligible small businesses with expenses such as:
Interest rates vary between 2.75 percent and 3.75 percent. Terms are based on the borrower’s ability to repay but may be up to a maximum of 30 years. Eligibility determination is the same as for SBA’s Payroll Protection Program loans.
Note: Beginning July 11, 2020, SBA no longer offers advances on Economic Injury Disaster Loans. Until July 10, 2020, eligible small business owners in all U.S. states, Washington, D.C., and territories were able to request an advance of up to $10,000.
The current maximum loan amount is $150,000 per entity or a maximum amount of $2 million for all affiliated businesses. Loan disbursements and advances are made through the U.S. Department of the Treasury’s automated clearing house system as deposits from SBA.
Lenders who have questions about eligibility or need to return money should contact SBA at eidl.ach.inquiries@sba.gov
What to Do if You Suspect Fraud
Lenders who suspect attempted fraud should contact the National Center for Disaster Fraud Hotline at 1-866-720-5721 or fill out the Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Lenders may also report fraud, waste, abuse, or mismanagement of federal funds involving SBA programs, operations, or personnel to the SBA OIG Hotline at (800) 767-0385. You can also submit a complaint form at https://www.sba.gov/about-sba/oversight-advocacy/office-inspector-general/office-inspector-general-hotline#section-header-0
Seeking and obtaining advice of counsel is an important step that small businesses should utilize prior to executing the final SBA EIDL loan documents and accepting receipt of federal funds in order to defend against an SBA OIG investigation or audit for potential fraud and abuse.
Protect Law Group has proven, nationwide experience handling regulatory and compliance issues involving the SBA loan program.
Owe more than $30,000? Contact Protect Law Group for a Case Evaluation or call us toll-free at 1-888-756-9969.
We can analyze your SBA debt or Treasury problems and advise you on potential solutions.
This presentation contains images that were used under a Creative Commons License. Click here to see the full list of images and attributions:
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.
Clients' 7(a) loan was referred to Treasury's Bureau of Fiscal Service for enforced collection in 2015. They not only personally guaranteed the loan, but also pledged their primary residence as additional collateral. One of the clients filed for Chapter 7 bankruptcy thinking that it would discharge the SBA 7(a) lien encumbering their home. They later discovered that they were mistakenly advised. The Firm was subsequently hired to review their case and defend against a series of collection actions. Eventually, we were able to negotiate a structured workout for $180,000 directly with the SBA, saving them approximately $250,000 (by reducing the default interest rate and removing Treasury's substantial collection fees) and from possible foreclosure.
Our firm successfully resolved an SBA 7a loan in the original amount of $364,000 for a New Jersey-based borrower. The client filed Chapter 7 bankruptcy but the mortgage on his real estate securing the loan remained in place. The available equity amounted to $263,470 and the deficiency equaled $317,886.
We gathered the pertinent documentation and prepared a comprehensive collateral analysis. We negotiated directly with the SBA, obtaining a full release of the mortgage for $80,000.
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.
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