SBA or Small Business Administration Loan Settlement
There is a lot of misinformation regarding Small Business Administration loan settlement as banks want to intimidate you into paying more than your business can afford, and your lawyers and accountants typically have little experience in this area and provide no alternatives other than bankruptcy to help you.
Since an SBA loan is a Federally guaranteed debt, people wrongly assume that you cannot file bankruptcy to discharge the debt and worse yet it cannot get settled outside bankruptcy.
This is wrong, as an SBA loan is just like any other business loan that you would obtain from a commercial lender. The participating bank issues the loan, but the banks’ losses are guaranteed by the government (up to a certain percentage) if you default on the loan. The debt is held by the participating lender and can be negotiated directly with them once you default on the loan. But there are many traps and pitfalls that you must be aware of that we have learned over many years working out SBA loans.
The bank and thus, the SBA, will aggressively pursue all your business and personal assets and liquidate everything it can to reduce the debt if left to their way.
If you do not take action on your defaulted SBA loan, things can get ugly for you.
If the participating bank “charges off” your loan to the SBA, negotiations can get even tougher. The Small Business Administration is a part of the US government. When you default on your loan and fail to reach a resolution with your bank, the bank will turn your case over to the Department of Treasury.
The Department of Treasury handles the collection of all Federal Debts including student loans, tax debt and yes, defaulted SBA loans. At the Department of Treasury the debt will be significantly harder to workout, so you want to avoid getting this far without a resolution with your lender.
If it has already been sent to the Treasury, we can still implement a satisfactory workout, it simply takes longer, is harder to accomplish and is frequently less successful than if worked out with the SBA.
Our approach is a very friendly approach to the bank and SBA. We include them in our workout team and satisfy the SBA requirements, to make certain the bank gets their guaranty payoff as soon as possible, and thus our strategy is for the benefit of the bank, as well. Our clients wins as well as the bank. This approach and strategy have served our clients and us extremely well for over 35 years. Everyone wins.
Our goal is to understand your needs as a business owner and provide the right solution in your SBA loan workout. We will negotiate a resolution directly with your bank and protect and preserve your operating business.
The strategy is very successful, having implemented it hundreds of times successfully over the years. After removing the debt from the business and then working out your personal guaranty to an affordable payoff, your business should be able to operate profitably and successfully. This is our objective.
If you are struggling with paying your SBA guaranteed loan, or if your note has been called or if you are in default, we can help you survive, emerge and succeed once again. Our strategies are time proven and totally acceptable to the SBA, which will issue the guaranty to the bank, and this drives the strategy to a successful conclusion.