SBA Loan Default: Bankruptcy
Dealing with an SBA OIC case can be hard. You should allow one of our lawyers to settle SBA debt on for you. Talk to us about your SBA loan default today.
Businesses can suffer from excessive debt, just as individuals can. According to the SBA, almost half of all small businesses fail within the first five years, mostly because of poor credit, excessive debt and insufficient capital. Borrowing is sensible when it’s needed to finance expansion or boost cash flow, but many businesses end up in SBA loan default because they are not able to repay what they owe. Here, business owners can learn their options for dealing with debt, including making an SBA Offer in Compromise
The most ideal option for many is to try to save the business while managing debt. Many business owners take money out of their pockets to fund the company, but this strategy should only be taken if it is likely to pay off in the long term. If the business cannot be saved with an infusion of private funds, the owner must identify ways to cut costs. While layoffs are not the most appealing option, they may be necessary to keep a struggling business afloat.
Business owners should stay in touch with customers, seeking ways to increase exposure and revenue. Offer markdowns to loyal customers if they pay quicker, and contact suppliers to ask for payment arrangements and discounts. If this is done early enough, it may be sufficient to save a struggling company.
The business owner should contact creditors and advise them of the situation. Ignoring an SBA demand letter will make the situation worse, and it is easier to handle debt early on through a Tax Offset Program. It is in everyone’s best interests to find a workable solution, and clients should request lower interest rates, increased credit lines and/or an SBA Offer in Compromise.
Another option is to try to sell the company to repay creditors. It is easier to deal with a single buyer than to go through SBA loan foreclosure, and an orderly sale may free the owner from later obligations once creditors are paid. However, if the business’ debts are more than its assets, it may be hard to find a buyer.
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 personally guaranteed SBA 7(a) loan balance of over $300,000. Clients also pledged their homes as additional collateral. SBA OIC accepted $87,000 with the full lien release against the home.
Client personally guaranteed SBA 7(a) loan balance of $58,000. The client received a notice of Intent to initiate Administrative Wage Garnishment (AWG) Proceedings. We represented the client at the hearing and successfully defeated the AWG Order based on several legal and equitable grounds.
Small business sole proprietor obtained an SBA COVID-EIDL loan for $500,000. Client defaulted causing SBA to charge-off the loan, accelerate the balance and refer the debt to Treasury's Bureau of Fiscal Service for aggressive collection. Treasury added $180,000 in collection fees totaling $680,000+. Client tried to negotiate with Treasury but was only offered a 3-year or 10-year repayment plan. Client hired the Firm to represent before the SBA, Treasury and a Private Collection Agency. After securing government records through discovery and reviewing them, we filed an Appeals Petition with the SBA Office of Hearings & Appeals (OHA) court challenging the SBA's referral of the debt to Treasury citing a host of purported violations. The Firm was able to negotiate a reinstatement and recall of the loan back to the SBA, participation in the Hardship Accommodation Plan, termination of Treasury's enforced collection and removal of the statutory collection fees.
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