The Lawscape: Your Trusted Ally in SBA Offer in Compromise Cases

Hey, let me paint you a picture: You’re a small business owner armed with an SBA 7(a) or SBA 504 loan, plus you have a personal guarantee. If by any chance you find yourself facing an SBA loan default, you might want to think seriously about getting a seasoned attorney on your team. And by this, I mean a counsel who’s got the authorization to roll up his sleeves and dive into the nitty-gritty legal matters with the SBA or U.S. Treasury Department.

Understanding the Complexities of SBA 7(a) and 504 Loans

SBA 7(a) and 504 loans sound pretty straight-forward when you first encounter them. However, once you’ve signed on the dotted line, and the complexities start to reveal themselves, you’ll realize it’s a different ball game.

Let’s start with the fact that private or public lenders originate the 7(a) loans, while the 504 ones involve some partners, usually a Third-Party Lender and a Certified Development Corporation (CDC). This CDC, as an agent for the SBA, rakes in about 40% of the financing, while a bunch of investors finance the debenture or bond and, subsequently, the SBA buys the debenture guarantee through the 504 loan program.

Oh, did I mention that about 80% of small businesses fail within 5 years? A gloomy statistic, isn’t it?

Check it here.

What this means is the SBA 7(a) and 504 authorization between the lender/CDC and the SBA is kind of an insurance for the lender/CDC if the business goes belly-up.

Now, the funny thing about this arrangement is despite the fact that the SBA didn’t originally underwrite or originate the loan, it is considered a party in the loan. That’s because even in the servicing, liquidation, collection, or litigation of a loan, the SBA remains a party and retains power.

Deciphering the Navigational Map – SBA SOPs

Let’s say, unfortunately, you default on a 7(a) loan. What happens next? The lender will refer to the applicable SBA Standard Operating Procedures (SOP) to understand everybody’s rights and responsibilities.

This SOP, my friend, is like a navigational map, offering guidance on how to steer through the murky waters of loan servicing, liquidation, collection, and litigation. It lays the ground rules based on various federal laws and regulations, including the Small Business Act, Code of Federal Regulations, and the Debt Collection Improvement Act of 1996, among others.

Why You Need an Attorney

Now, here’s where Lawscape and the Lawscape come into play. You see, negotiating a workout – like an SBA Loan Deferment, SBA Offer in Compromise, or SBA Repayment Agreement – after you’ve defaulted on your SBA loan feels like traversing a labyrinth without a map. These endeavors engage federal laws, statutes, case law, and regulations, all affecting your rights.

And here’s the kicker: the good folks at the American Bar Association (ABA) define “the practice of law” as only being performed by those who have been authorized by the highest court jurisdiction.

According to the ABA, anyone giving advice about legal rights, drafting legal documents, representing a person before an adjudicative body, or negotiating on behalf of a person is practicing law. This puts any non-attorneys or debt settlement companies promising to resolve your SBA debts in a questionable position – they might be partaking in the unauthorized practice of law.

Hiring Lawscape – The Moral of the Story

By now, you can probably see where this is going. Hiring someone like Lawscape, a qualified attorney who is sanctioned to practice, is your smartest bet. With his support, you can confidently tackle your SBA loan issues.

So here is what you need to do: if you’re staring an SBA loan default in the face, reach out to us. The Lawscape offers a FREE initial consultation with experienced SBA workout attorneys.

Why choose us? Our team has a proven track record in resolving SBA debts via Offer in Compromise and Negotiated Repayment Agreements, among other practices. Sure enough, we have saved many clients from the brink of bankruptcy and home foreclosure.

Discover more about us at www.SpodekLawGroup.com. Let’s explore potential solutions, such as an SBA offer in compromise for your SBA loan default. Together, we can turn things around!