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
Business owners who face financial difficulties could also face devastating effects. These effects could lead to foreclosure of their commercial property. For these business owners, this could cause damaging effects on their credit and prevent them from starting new ventures in the future. A local attorney could help them request a SBA Offer in Compromise today.
This options allows the attorney to negotiate a settlement offer. The settlement offer is considerably lower than the total loan value. This makes it easier for the business owner to settle the debt. Since this action ensures recovery of the loan, most lenders will accept the offer based on the guarantee to pay this value in full. Business owners who wish to acquire this opportunity should take action as soon as they receive the SBA demand letter.
Before a SBA loan foreclosure, the business owner should hire an attorney. The attorney helps them to calculate a fair settlement. The value could equate to up to fifty percent of the total loan value. When this request is submitted to the lender, the borrower should provide documentation of their income to prove their ability to pay. If they choose to sale their commercial property, they could provide documentation about the sale to show their ability to pay the debt.
Business owners who are facing the effects of a loan default may also have overdue taxes. When this is the case, they also face seizure through the IRS of their assets. An attorney could also help them to enter into a Tax Offset Program. This could help them to acquire a settlement for their overdue taxes and eliminate these debts altogether. It is possible for them to acquire an installment plan to pay off overdue tax payments.
Business owners who experience financial difficulties could face defaults and foreclosure. These effects could present a damaging effect on their credit and disqualify them for more government-backed loans in the future. Business owners who are facing a SBA loan default should contact an attorney today to acquire more information about their options.
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 negotiated an SBA offer in compromise (SBA OIC), settling a $974,535.93 SBA loan balance for just $18,000. The offerors, personal guarantors on an SBA 7(a) loan, originally obtained financing to purchase a commercial building in Lancaster, California.
The borrower filed for bankruptcy, and the third-party lender (TPL) foreclosed on the property. Despite the loan default, the SBA pursued the offerors for repayment. Given their limited income, lack of significant assets, and approaching retirement, we presented a strong case demonstrating their financial hardship.
Through strategic negotiations, we secured a favorable SBA settlement, reducing the nearly $1 million debt to a fraction of the amount owed. This outcome allowed the offerors to resolve their liability without prolonged financial strain.
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.
Client’s small business obtained an SBA 7(a) loan for $750,000. She and her husband signed personal guarantees exposing all of their non-exempt income and assets. With just 18 months left on the maturity date and payment on the remaining balance, the Great Recession of 2008 hit, which ultimately caused the business to fail and default on the loan terms. The 7(a) lender accelerated and sent a demand for full payment of the remaining loan balance. The SBA lender’s note allowed for a default interest rate of about 7% per year. In response to the lender's aggressive collection action, Client's husband filed for Chapter 7 bankruptcy in an attempt to protect against their personal assets. However, his bankruptcy discharge did not relieve the Client's personal guarantee liability for the SBA debt. The SBA lender opted to pursue the SBA 7(a) Guaranty and subsequently assigned the loan and the right to enforce collection against the Client to the SBA. The Client then received the SBA Official 60-Day Notice. After conducting a Case Evaluation with her, she then hired the Firm to respond and negotiate on her behalf with just 34 days left before the impending referral to Treasury. The Client wanted to dispute the SBA’s alleged debt balance as stated in the 60-Day Notice by claiming the 7(a) lender failed to liquidate business collateral in a commercially reasonable manner - which if done properly - proceeds would have paid back the entire debt balance. However, due to time constraints, waivers contained in the SBA loan instruments, including the fact the Client was not able to inspect the SBA's records for investigation purposes before the remaining deadline, Client agreed to submit a Structured Workout for the alleged balance in response to the Official 60-Day Notice as she was not eligible for an Offer in Compromise (OIC) because of equity in non-exempt income and assets. After back and forth negotiations, the SBA Loan Specialist approved the Workout proposal, reducing the Client's purported liability by nearly $142,142.27 in accrued interest, and statutory collection fees. Without the Firm's intervention and subsequent approval of the Workout proposal, the Client's debt amount (with accrued interest, Treasury's statutory collection fee and Treasury's interest based on the Current Value of Funds Rate (CVFR) would have been nearly $291,030.
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