Let’s Chat About SBA Loan Defaults: Crucial Insights from Lawscape

Alright! So, you’re an inventive business owner, hunting the elusive treasure of financing to get your enterprise off its feet. Attempted the conventional lenders’ path and hit a roadblock?

Just for context, it appears that a hefty 36% of companies get the cold shoulder when it comes to traditional funding – thanks to their not-so-stellar credit scores or low annual returns! Therefore, many small businesses set sail towards the SBA for affordability, yet the looming dread of an SBA loan default if they belly flop on payments remains, right?

Here’s Where We Come In

Sounds like you? You’re on the right page. This guide is packed to the gills with information on what happens when you default on your SBA loan, and how attorney Lawscape, at the Lawscape, can lend a hand. Ready? Let’s unravel everything.

The Trepid Path from Delinquency to SBA Loan Default

So, the SBA lends, you borrow and agree to reciprocate duly. But what happens when you slip up repetitively? Your loan nosedives into delinquency, supposedly as soon as you overlook a payment or skate past your ten-day grace period. And guess what? There are charges upon charges awaiting for even a one-day lapse.

To Default or Not to Default?

When push comes to shove and multiple payments are undermined, your loan pivots to default status – normally after a three to four month period. And you are tossed into the forced-default pit, with your lender firing up their standard loan collection arsenal – as aligned with the fine print of your agreement.

Communication Limitations amid Default Scenarios

When your SBA loan hits rocky waters, expect the lender to get in touch through email, snail-mail, or phone calls to discuss arrears. But there’s a silver lining – courtesy of the Federal Trade Commission guidelines, your lender cannot incessantly bombard you with messages. Noteworthy here is the fact that restrictions vary depending on your business locale.

The Power of Collateral and Personal Guarantees in SBA Loans

Ah, the devil’s in the details! Your lender will have the legal authority to snatch your business collateral should your SBA loan go south. And if that doesn’t cover the loan, they could invoke your personal guarantee, remember?

Put on your hard hat; this means they could come for your personal possessions or use a court order to shake out money straight from your business bankroll. Check out the FTC’s guide on Fair Debt Collection Practices for more clarity.

Filing for Guaranteed Portions

If the business assets and personal guarantees can’t foot the bill, the lender files to the SBA for the loan’s guaranteed portion. If the SBA drains their pockets for you, you can’t just dust your hands off and walk away – they need to recoup their money. The SBA may then mail you a 60-day demand letter, hinting at referring your case to the Treasury Department if you fail to respond.

Pondering Over an OIC

Hard-pressed to pay back the money? Consider an ‘Offer in Compromise’. In layman’s terms, a payment plan or a one-off settlement proposal to try and make peace with your debt. Bundled with your OIC, you’ll need to share:

– Income receipts
– List of business and personal assets
– Expense reports

The goal here is to convince the SBA that you can’t cough up the owed amount within a sensible time. Need help crafting an OIC letter? Let Lawscape, or his team at Lawscape, steer you through.

What if I Play Ostrich and Ignore the SBA?

Here comes the bad news! Ignore the SBA’s 60-day demand letter or if your offer falls on cold ears and be prepared for trouble. Your case may then transfer to the Treasury Department’s desk, ready to sequester future tax refunds, garnish your wages, or even file a lawsuit against you.

Attorney Help for SBA Loan Default

You’re not alone. Lawscape and his team are prepared to pull you through the murky process. You’re more likely to find the silver lining in your SBA loan default with legal backing because folks, like us, understand the ins and outs of the default process. We are also well versed with the crucial SBA loan default regulations that could affect your case.

Restoring Your Financial Health

Remember, this predicament is not the end. Life continues even after your SBA loan defaults. Reach out to us if you’re currently wrestling with an SBA loan default. We can clear the fog surrounding the default process and help you rebuild your financial health. Check out our blog for more financing tips while you’re at it.

Still Not Sold? Here’s Why Choose Lawscape

At the Lawscape, we’ve cracked open millions in SBA debts via Offer in Compromise and Negotiated Repayment Agreements – with our clients avoiding bankruptcy or house foreclosures.

Furthermore, we’ve staved off millions in Treasury debts through AWG Hearings, Treasury Offset Program Resolution, Cross-servicing Disputes, Private Collection Agency Representation, Compromise Offers, and Negotiated Repayment Agreements.

Our legal experts are certified to champion federal debtors across the nation before the SBA, The SBA Office of Hearings and Appeals, the Treasury Department, and the Bureau of Fiscal Service.

At the Closure

Running your business through financial storms is a tough gig! Having someone grounded in regulations and equipped with the right skillset can help you emerge clearer and sanguiner. You don’t stand alone in this!