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SBA Offer in Compromise

For the vast majority of shell-shocked small business owners, the closure of their business and the liquidation of its assets does not bring an end to the traumatic default process.

While the SBA guaranty may protect the lender, it does nothing to protect the business owner and other guarantors on the SBA loan. Subsequent collection efforts can result in the loss of assets or even wage garnishment by the U.S. Treasury.

SBA loans are dischargeable in bankruptcy, but bankruptcy is not the only option for dealing with an SBA loan default.

During the critical time after your business assets have been liquidated and before any further litigation has been commenced, it is often possible to enter into settlement negotiations with the lender and the SBA to completely resolve the remaining loan deficiency for a fraction of the total amount due. SBA loan default help is available. This process is referred to as the SBA Offer in Compromise program.

Our SBA Deficiency Resolution package includes:

• Review your Case
• Review your original SBA loan documents
• Collect financial data, including a complete lists of assets and liabilities
• Notify your lender or the SBA of your intent to Settle
• Prepare SBA Form 1150 (Offer in Compromise)
• Prepare SBA Form 770 (Financial Statement of Debtor)
• Review all financial data and suggest settlement terms
• Prepare and file the Offer in Compromise with the Bank/SBA
• Commence settlement negotiations with the Bank/SBA
• Amend your offer package, if necessary and resubmit

How Does Approval Work?

The SBA is not required by law to accept an Offer in Compromise from any borrower. However, the SBA knows a certain percentage of loans will fail and it is for this reason that the SBA Offer in Compromise program exists.

Keep in mind that the SBA is looking for the “best deal” it can get. If your offer provides them with a quick, cost-effective, resolution to the matter that is superior to what they might receive over a five year period using enforced collection methods, they will seriously consider it.

Is There Anything I Can Do to Help Myself?

Yes, there is one thing: take action. Prompt action increases the likelihood that your offer will be successful.

If you receive a 60-day demand notice from the SBA, it’s important that you take action. If you wait too long to initiate settlement discussions, the SBA may transfer your account to the U.S. Treasury Department’s Treasury Offset Program (TOP).

Under top your IRS tax refund can be seized, and your wages garnished. Even your Social Security benefits can be offset.