The Best Things about SBA Loans
SBA loans are made to help small businesses for them to get up and running. It can in fact be risky, which is the reason why the federal government helps entrepreneurs who have troubles in getting a loan under normal circumstances. This is really helpful to our economy.
It is actually not he SBA that makes the loans itself, but it makes it possible through guaranteeing the loans which are being made by other lending institutions. What happens on a default is where the lending bank will contact you and will also explain the details on the default and how you can provide remedies for it.
When you cannot make the payments which are necessary, the lender then starts on collecting on what were stated on the agreement of the loan. It also includes the sale process of the assets that is being used to collateralize the debt. It also includes the business assets and when you acquire larger loans, it could even include your properties like your home. A lender can in fact close the business and they also may foreclose the property.
If in case it reaches a point where the lender has used all of the options on recovery, they are going to make claims to the SBA. If in case the SBA guarantee is going to kick in and that the federal government repays the share of the loan for you.
With the lender already paid, you now will deal with the SBA. You will get a notice coming from the SBA which will explain that you will need to pay the remaining balance or perhaps present an “offer in compromise”. This situation means that the SBA is going to review your financial situation and may accept less than what’s being required. The key in these kind of situations is to present a settlement amount that’s substantial and one that is also sustainable. The SBA in fact has no interest on payment plans which you cannot meet.
When the SBA has accepted your offer, all sides are going to be happy because you are able to make the repayments. In case the SBA is going to reject the offer, you will be given the opportunity to recalibrate and for you to submit again. There are instances sometimes where the SBA sends the account to the treasury department. On such instances, the treasury department comes with different collection options.
You probably have the option in settling the loan with the treasury department, but it can be a tedious task. This is why it is best that you are going to look for solutions at the start of the process to when the loan is still at the original lender.
After settling the debt, you then can move forward and be able to focus on your financial health.