Mortgage Debt has become a troubling issue for many businesses over the last few decades. With the expansion of business credit in the small business arena, many small business owners decided to purchase business real estate assets rather than renting. The financial crisis put many of these business owners “underwater” on their investments, and the decision to own rather than rent is weighing down their business.
The “Sale-Leaseback” strategy is one we often employ in these situations with our clients. If the business property can be rented for less than the carrying cost of the property, it would be a wise decision to dispose of the “underwater” real estate assets and free the business from the shackles of this debt. This is the result we aim to achieve.
However, cross-collateralization and cross guarantees often make this situation difficult for most business owners, so they decide they cannot do it. It is not the case – we handle the disposition and reorganization of real estate assets for our clients as well as the settlement of any related personal guarantees.
Often we handle the settlement and negotiation of liens on personal real estate resulting from the default on a business debt. We do not handle mortgage deficiency judgments or underwater real estate issues related to residential debts. Our practice is focused on helping businesses succeed and removing liabilities for the individual business owners, not consumers.
If your real estate “investment” is starting to weigh your business down, it would be prudent to explore your options with us. To learn more about what Second Wind can do for you regarding your guaranteed debt to the SBA please request a one hour, no obligation consultation with us.
Redundant and covered under defaulted mortgage debt.
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