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
Small business owners have access to financing that is guaranteed. This funding option helps them to acquire everything they need to start their business. This may include acquiring a property, inventory, or machinery for their business. However, businesses that are prospering may face financial issues due to delinquent loan payments. A SBA Offer in Compromise could provide them with an opportunity to reduce the repercussions for these failures.
The business owner receives a SBA demand letter when they are in default on their loan. The damage letter may require them to pay the entire balance of their account. To avoid immediate foreclosure of the property used as collateral for the loan, the business owner needs to contact an attorney. They should provide the attorney with the letter and any correspondences received from their lender. The business owner must take quick action when they have a SBA loan default. If they don't, the lender can foreclose on the property and destroy their credit.
A SBA offer is a percentage of the total loan value. Since the loan is guaranteed by the Small Business Administration, the consumer may have some leverage. This guarantee ensures the lender that they will receive a portion of the loan. However, the consumer will be required to pay the remaining balance. By submitting a settlement offer, the business owner prevents the potential damage caused by foreclosure.
A SBA loan foreclosure indicates that the lender has started the seizure process. They will place the property up for auction once they have possession. They sell it to the highest bidder. Any balance that is left over requires the borrower to pay off. If an attorney can acquire a settlement offer, the borrower avoids these consequences completely.
Small businesses need help when they are facing foreclosure. Once they are at least ninety-days delinquent, their lender can take legal action to take their property. The foreclosure process can have a lasting effect on the business owner and their ability to continue to operate their business. Company owners who need assistance with a settlement offer or Tax Offset Program should contact an attorney now.
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.
Small business and guarantors obtained an SBA COVID-EIDL loan for $1,000,000. Clients defaulted causing SBA to charge-off the loan, accelerate the balance and refer the debt to Treasury's Bureau of Fiscal Service for collection. Treasury added nearly $500,000 in collection fees totaling $1,500,000. Clients were served with the SBA's Official 60-Day Notice and exercised the Repayment option by applying for the SBA’s Hardship Accommodation Plan. However, their application was summarily rejected by the SBA without providing any meaningful reasons. Clients hired the Firm to represent them against the SBA, Treasury and a Private Collection Agency. After securing government records through discovery, we filed an Appeals Petition with the SBA Office of Hearings & Appeals (OHA) court challenging the SBA's referral of the debt to Treasury. During litigation and before the OHA court issued a final Decision and Order, the Firm successfully negotiated a reinstatement and recall of the loan back to the SBA, a modification of the original repayment terms, termination of Treasury's enforced collection and removal of the statutory collection fees.
Our firm successfully resolved an SBA 7(a) loan default in the amount of $140,000 on behalf of a husband-and-wife guarantor pair. The business had closed following a prolonged decline in revenue, leaving the borrowers personally liable for the remaining balance.
After conducting a comprehensive financial analysis and preparing a detailed SBA Offer in Compromise (SBA OIC) package, we negotiated directly with the SBA and the lender to achieve a settlement for $70,000 — just 50% of the outstanding balance. This settlement released the borrowers from further personal liability and allowed them to move forward without the threat of enforced collection.
Our firm successfully assisted a client in closing an SBA Disaster Loan tied to a COVID-19 Economic Injury Disaster Loan (EIDL). The borrower obtained an EIDL loan of $153,800, but due to the prolonged economic impact of the COVID-19 pandemic, the business was unable to recover and ultimately closed.
As part of the business closure review and audit, we worked closely with the SBA to negotiate a resolution. The borrower was required to pay only $1,625 to release the remaining collateral, effectively closing the matter without further financial liability for the owner/officer.
This case highlights the importance of strategic negotiations when dealing with SBA settlements, particularly for businesses that have shut down due to unforeseen economic challenges. If you or your business are struggling with SBA loan debt, we focus on SBA Offer in Compromise (SBA OIC) solutions to help settle outstanding obligations efficiently.
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