The federal Small Business Administration does a lot of important work for the nation’s economy, advocating for and educating the founders and operators of hundreds of thousands of small companies. One of the SBA’s most popular service offers is its loan program, an option that can see borrowers gaining access to credit at favorable terms where they might otherwise have been denied. While the program itself is therefore fairly generous, an SBA loan default is typically a serious matter, as the agency has a variety of ways of recouping money that might normally be drained from its coffers.
Borrowers who have failed to keep up with payments typically receive ample notice before things become more serious, however. By the time an SBA demand letter arrives in a borrower’s hands, it is best to have already begun making arrangements to satisfy the obligation. Avoiding an SBA loan foreclosure or other harsh measure should almost always be a high priority, and it can be much easier to do so when skilled assistance is available.
The fact is that many borrowers have options beyond finding the money needed to fully satisfy a loan. While it can be difficult for laypersons to extract concessions from SBA negotiators and agents, those who are informed about the law and the relevant norms often have much greater success.
What this often means in practice is that it can be a good idea to get in touch with an attorney once it becomes apparent that trouble is in the making. One commonly appealing option is for a business owner to settle a loan with lessened requirements compared to the original terms, a victory that can allow a company to continue instead of effectively being forced into bankruptcy.
Obtaining such an SBA Offer in Compromise can be challenging, but the results are frequently worth the effort that is put in. An acceptable offer can see a company and its owner freed from the threat of foreclosure or the confiscation of refunds under the Tax Offset Program, making it much easier to recover from financial difficulties. For these reasons and others, actively seeking out the best possible resolution is typically far superior to allowing things to run their course.