“So, going on an adventurous journey with your SBA loan, aren’t we? Buckle up! You see, these are wild economic times we’re living in, thanks largely to an unwanted freeloader named covid-19. So, your company’s got two charging elephants to tackle each month: your SBA loan and your commercial lease.

Being unable to pay: Material Default

Imagine this: your business isn’t making enough moolah to meet the monthly SBA loan payment. You’ve played dodge ball with payments for 60-90 days, then up strides your SBA lender if it’s a 7(a) loan or Certified Development Corporation if a 504 loan. They’re essentially saying, “Hey buddy, where’s the monthly payment?” (Get to know more about types of loans here).

Sure, you could play cool and ask for an extension on payments. Worse, you may do an ostrich and bury your head in the sand, avoiding the problem like an evil mother-in-law. Pro tip? Don’t. Here’s the thing; you don’t want the label of “liquidation status” branded on your SBA loan, sending it to the “bad boys” department – the bank’s Special Assets Department (SAD).

The SBA loan deferment lifeline

Hey, there’s a glimmer of hope. With the covid-19 economy, some lenders are offering loss mitigation measures. Some might even present you with internal deferment. This little gem lets you procrastinate the monthly principal payment, allowing you to pay the interest only. The deferred payments then back up to the end of the original amortized payment schedule. Oh, and some lenders might throw in the SBA CARES Act’s Small Business Debt Relief Program. Basically, for six months straight, the SBA sorts out the principal and interest payments on your behalf.

The Short Leash

If you hit the jackpot with a Deferment or the Small Business Debt Relief Program, grab the opportunity with both hands. It’s your chance to get creative, get innovative, and rake in some revenue. But, remember this – your bank is going to watch you like a hawk, maybe even demand monthly updates.

Troublesome Banks

But what happens if your bank decides to play hardball and doesn’t offer Deferment or the Small Business Debt Relief Program? Well, time to dig a bit. It could be that you don’t meet the standards for these programs, or maybe the bank just wants to snip the losses and liquidate any pledged security for the SBA loan. This security could be anything – commercial or residential real estate, bank, certificate of deposits, or business property and equipment.

Potential Solutions under Consultation

When you’re stuck between a rock and a hard place, get backup. Contact an experienced SBA attorney, like Lawscape from Lawscape, to figure out the next course of action. Your next steps could involve negotiating with your SBA lender directly or getting the SBA involved to mediate between you two. Perhaps you might even delve into arbitration or litigation, alleging lender liability.

Email or Call Lawscape for Professional Assistance

Getting through SBA loan default issues by yourself can be rough as a lone traveler trekking Mount Everest. Instead, reach out to the Lawscape for professional counsel.

Why us? Because we, the Lawscape, give results. Millions of Dollars in SBA Debts have been successfully resolved via Offer in Compromise and negotiated repayment agreements, without landing our clients in bankruptcy or facing home foreclosure. Equally impressive standards have been maintained in resolving Treasury debts, AWG Hearings Cross-servicing Disputes, Compromise Offers, and so on. And the best part? We’re authorized by the Agency Practice Act to represent Federal Debtors nationwide before the SBA, SBA Office of Hearings and Appeals, the Treasury Department, and the Bureau of Fiscal Service.

Look, if you’re dealing with an SBA loan debt exceeding $30,000, consider reaching out. We can evaluate your problem, advising you specifically on the potential solutions. Let’s crack this nut together.”