Weaving Through the Fog of SBA Loan Repayment

Imagine this: your thriving small business hits a few bumps on the road and suddenly, repaying that SBA loan has never seemed so impossible. You’re certainly not alone. About 50% of small enterprises don’t see it past the five-year mark. And dare I say, quite a few of them could have been rescued with savvy financial management, perhaps even a simple loan deferment.

So let’s talk about SBA Loan Deferment, a lifeline that may turn your business’s fortune around. The Small Business Administration (SBA) has in recent times pushed for lenders to become more flexible with their loan deferments. The trick, however, is in how to qualify. Here at Lawscape, we’ve broken it down into four key steps.

1. Showcase Your Cash Flow

You have to prove your financial standing. Cash flow isn’t just about the money making its way in and out of your bank account – it serves as a measure of your business’s health. The good news is that your close relationship with those financial books might just save you.

If you’re dealing with slow sales but running your business correctly, high chances are you can get a deferment. But you do need to convince the SBA and the lenders. Exhibit your understanding of the situation by explicitly stating it in your cash flow statement.

2. Demonstrate Responsibility

To paint this into a clearer picture, let’s consider for a moment that loan deferment is only given to companies that are financially responsible but are struggling with minor obstacles, often beyond their control. External factors, such as effects of political swings like the 2019 government shutdown or increases in tariffs for manufacturing materials can impact businesses.

Moreover, if your business operates on thin margins, don’t hesitate to articulate that to your lender. The key is to present solid evidence that you consistently make on-time payments, proving you to be a commendable borrower deserving of loan consideration.

3. Communication is Key

Now, this one might sound simple, but you’d be surprised at how many owners underestimate the power of clear, open and timely communication with lenders. It is crucial to promptly submit all required documentation and establish a good rapport with your lender. Remember, you’re the one seeking their help.

This once again brings forth the importance of being prepared. When asked to submit an application package for deferment, be prompt. Check, double-check and triple-check everything they need. Being meticulous isn’t just a fancypants attribute; it’s one that often separates the succcessful applications from the rest.

4. Equip Yourself With Collateral

Providing collateral when seeking a loan deferment not only instills confidence in the lender about your commitment to making your business work, but it also guarantees your loan.

However, if the collateral – be it equipment or property – you offer is significantly worth more than what you owe, be wary. The lender might liquidate it if your business model seems flimsy. Cue our mantra: communicate clearly, especially at the first hint of trouble to shield your business.

Unraveling the Truth About Loan Deferment

In essence, acquiring an SBA loan deferment might not be as complex as it seems. It involves maintaining clear, honest communication, demonstrating financial responsibility, having a deeper understanding of your financial situation, and being ready with collateral.

If your business is on the blink of defaulting on an SBA loan, we at Lawscape are here to help. Our proven track record includes millions of dollars worth SBA debts that have been resolved via compromise offers and negotiated repayment agreements. We’ve achieved this without our clients having to file for bankruptcy or face home foreclosure.

Why Choose Lawscape?

At Lawscape, we’re more than just about the numbers. Our attorneys are authorized to represent clients nationwide before the SBA, the SBA Office of Hearings and Appeals, the Treasury Department, and the Bureau of Fiscal Service. Reach out to us today and let’s navigate these stormy waters together.