Contact us for a Free Case Evaluation at: (888) 303-6975

SBA Loan Default – Can I Modify My Note?

We provide individuals who are facing SBA loan default with solutions. For instance, we will help you understand different SBA loan problems and will teach you about SBA offer in compromise.

Dealing with the idea that you might be facing SBA loan default can be terrifying. The SBA attorneys in our office are skilled at helping clients understand all of the facets of their situations. If, for instance, you need to know what an SBA offer in compromise is, you can simply ask your lawyer. You should never face SBA loan problems alone. It is important to retain the services of an attorney who can help you through this difficult time in your life. We urge you to read about the services that we have available and to contact us if you believe that we can be of assistance to you right now.

Many Borrowers ask the question – can I modify my note?  In certain circumstances a note can be modified.  With regard to 7(a) Loans sold on the secondary market, the Secondary Participation Guaranty Agreement (SBA Form 1086) prohibits any change to the repayment terms of the Note unless the guaranteed portion of the loan has been purchased by SBA or the written consent of the secondary market investor has been obtained—unless the modification involves a one-time deferment that does not exceed a continuous period of three monthly installments.

The date that regularly scheduled installment payments are due may be modified to facilitate the Borrower’s ability to repay the loan or a workout.  For example, payments originally scheduled to be made on a monthly basis, may be changed to a quarterly or annual basis if there is justification for the change such as the seasonal or cyclical nature of the Borrower’s revenue stream.

A loan may be changed from a revolving loan to a non-revolving loan to facilitate the repayment or orderly liquidation of the loan.

The installment amount due under a Note may be modified to ensure that the loan balance is properly amortized over the remaining life of the loan, to help a viable Borrower meet long or short term goals, or to facilitate a workout.

The interest rate on the Note may be modified to help a viable Borrower meet long or short term goals, or to facilitate the recovery on a loan in liquidation status.  For example, the interest rate may be modified as part of a workout agreement designed to achieve the highest possible recovery in the shortest amount of time.

Finally, the maturity date of a Note may be extended for up to 10 years beyond its original maturity date if:
a.  The extension is requested before the SBA loan guaranty expires, i.e., less than 180 calendar days after the original maturity date; and
b.  The extension will aid in the orderly repayment of the loan.

If you are in default on your SBA loan, please contact us at 888-756-9969 for your FREE case evaluation.

 

 

We are here to help you with your SBA loan problems.

Call our experienced attorneys at (888) 303-6975 anytime for a Free Case Evaluation