Do You Have SBA Or Other Small Business Loan Debt?
Starting a new business requires an initial investment of capital. In recent years, rather than pulling from savings, people are taking out small business loans often through the Small Business Administration (SBA). While there is certainly nothing wrong with taking out a loan to fund the initial start-up costs or ongoing operating expenses, the first couple of years operating a business are often unpredictable. And recent economic conditions have made small businesses even more unpredictable, even for experienced business owners.
Accumulating debt in the beginning can be fatal for a small business. And falling too far into debt can accrue insurmountable interest. Instead of letting your debt destroy your small business or declaring bankruptcy, let the lawyers at McCarthy Law guide you through the debt settlement process.
You want to avoid bankruptcy, if at all possible. Declaring bankruptcy destroys your credit and will make it very difficult to get a business loan in the future. The good news is there are several other small business debt relief options that can free you from debt and keep your small business running.
Over the years we have found that people of all walks of life were deeply affected by the most recent financial crisis that took place in the United States. However, I have found that a large portion of those people were small business owners. Not only were these small business owners defaulting on their business credit cards but they were also defaulting on their secured loans through the Small Business Association (“SBA”).
SBA loans are loans that are lent through private institutions but that are backed by the Federal government through the SBA. Since these loans are back by the Federal government, SBA loans are secured loans that list collateral in the loan agreement so that if you were to default, the lender had the right to recover what is owed through the sale of the collateral. However, if what is owed is more than what the collateral can be sold for – you are still liable for the deficiency. This collateral can be your primary residence, your business assets, your car, etc.
How SBA Debt Attorneys Can Help Eliminate Your Business Debt
Eliminating small business debt is the key to financial freedom and getting the relief needed for you to focus on your business. The lawyers at McCarthy Law negotiate for large reductions in small business debt, including large reductions in principal. By negotiating down the debt to a manageable amount, we help clients settle and eliminate the debt in as few as 6 to 36 months, without the need for bankruptcy.
You need to make sure you have an experienced professional’s help with this process. Many debt relief companies claim that they can rid you of your debt, but are unable to follow through. Having a licensed attorney on your side ensures that you will get the best deal possible and you will not be taken advantage of by creditors. Attorneys are obligated to keep your dealings confidential. This is important when dealing with small business debt because you do not want rumors of debt problems ruining your company’s reputation.
What is Attorney Negotiated Business SBA Debt Settlement?
This process involves working with your creditors to negotiate a lower balance of the debt. You will be much better off if you are represented by a licensed attorney in this process. Creditors are more willing to work with attorneys and will likely give you a better deal if you are represented. Also, attorneys are familiar with laws regarding what a creditor can and cannot do when trying to collect a debt. This means that your creditors will be more likely to respect your rights and treat you fairly if you’re represented by an attorney. More importantly, we send a letter to your creditors instructing them to stop contacting you and direct all communications to us instead.
No small business owner wants to file bankruptcy. A Chapter 13 bankruptcy can take 5 years to complete, and you still end up paying back most of the debt. Let the attorneys at McCarthy Law walk you through your options in a free consultation.
What Are Some Solutions to SBA Debt?
If you have $20,000 or more in SBA loan debt and your business is no longer operational, there is a solution. This solution is called an offer-in-compromise. In order to qualify for a principal balance reduction in your debt, the SBA is going to want to see all of your financials and wants to be convinced of the fact that the offer you are making for payment is the best possible offer you can make based on what your financials support.
Once a financial statement, all requested financial documents and an offer is sent to the lender, both the lender and the SBA must agree to either accept the offer or not. The SBA may provide a counter-offer or they may simply reject your offer. Due to the fact that the SBA and the lender must agree to the settlement, it usually takes some time to actually finalize negotiations.
Do not wait until years after your business closes to start think about negotiating your SBA loan. You want to negotiate when you have the least amount of assets and the most amount of debt. You need an experienced attorney to help you decide if an offer in compromise is a good solution for you.