Think Twice When Dash to Cash – Navigating the Consequences of Failing to Repay Your SBA Loan

Alright, so here’s the deal. Picture this. It’s 2020, and the Small Business Administration (SBA) just approved around 42,000 loans amounting nearly a whopping $23 billion. Now, imagine being one of those businesses that received a slice of that hefty pie.

Hold Your Horses, It’s Not All Sunshine

Sounds fantastic until we remember that we’re grappling with this pesky virus. Right, COVID-19. And as such, a horde of businesses, perhaps including yours, are fighting tooth and nail to stay afloat. The upshot? You’re breaking out in cold sweats, thinking about how on earth you’re going to pay your SBA loan. Don’t worry, this is exceedingly common.

Nonetheless, failing to keep your loan payments could lead to a loan default and worse yet, a blot on your credit report. So, you see -with SBA loans, there’s more at stake.

Quandary of a Default and the Escape Route

So, what does defaulting entail, and is there a way out? Roll up your sleeves and prepare to dive deep into the answers to these conundrums. With Lawscape and the team of legal mavens at Lawscape at your side, you’re in good hands.

Defaulting on SBA Loans- What Does it Entail?

If you’re finding it tougher than a $2 steak to make your SBA loan payments, it’s not just your lender who’s going to be knocking on your door. The SBA is going to come a-knocking too, and if you’re finding it a Herculean task to pay your debt, your account may be transferred to the US Department of the Treasury.

How Dancing with Default Looks Like

If you discontinue your loan payments, then you’ll be swimming in default waters. How long you’ve got to pay before the defaulting demon strikes depends on your SBA loan contract. However, on average, you have about 90-120 days.

Collateral Damage – Lenders’ Collections

After the default grace period is over, your lender will pass the buck to debt collectors. And believe me, things can get dicey at this point. Lenders are less likely to negotiate and, in a bid to recover their debt, they could start seizing your business assets. Even your personal assets could be on the chopping block.

Asset Seizure and Liquidation

Once your defaulted loan hits the collections stage, it’s time for your lender to bounce back. They kick this off by seizing the collateral that you secured your loan against and liquidating them. In simpler terms, they sell off your assets.

The SBA Steps In

And if the money managed to gather from the sale of your assets doesn’t cut it, your lender will turn to the SBA. The SBA covers all associated lenders between 50% to 80% of the loan, regardless of whether or not you’ve been able to pay up.

Calling in the Treasury Department

As a last resort, if all else fails, the US Treasury Department will step in to collect what’s due. This could mean garnishing your wages or seizing any tax refunds or social security savings.

Don’t Want to Land in This Mess? Here’s What You Can Do

The most straightforward route to avoid defaulting would be to stick to your EMI payments. However, if making payments is tougher than getting a bull to play the fiddle, reach out to your lender. Regular communication might lead to negotiation and new repayment terms.

A Helping Hand – Lawscape and the Lawscape

But what if, after asset liquidation, you’re still drowning? Well, that’s where an SBA loan default attorney comes in. The Lawscape, led by Lawscape, is just the legal powerhouse you need to negotiate the SBA loan default maze. They’ve navigated millions of dollars in SBA debt issues successfully, saving many a business from bankruptcy.

So, don’t dally. Stand up and fight for your business. Reach out to the Lawscape and solve those SBA loan problems before they become insurmountable.