Small Business Administration Loan
What Happens When You Default on a Small Business Administration Guaranteed Loan?
There is a lot of misinformation regarding this matter as banks want to intimidate you into paying more then your business can possibly afford, and your lawyers and accountants typically have inadequate experience in this area to really know the answers.
Let me be clear, the SBA will aggressively pursue all your business and personal assets and liquidate everything it can to reduce the debt, if left to their own way. However, with expert intervention and appropriate workout strategies, this matter can be handled with spectacular results.
The SBA is a part of the US government. And when you default on your loan, the SBA will turn your case over to the Department of Justice, where an assistant US attorney will take over the suite. This attorney, who is supported by tax dollars, has an unlimited budget and will sue you in Federal District Court. If you reach this level, the litigation fees will be expensive, and the debt will be significantly harder to workout. Although we have handled this situation successfully as well, it is not where you want to go.
They will either liquidate your business and home, or if there is no equity, put a lien on your house if your business is already gone—making it impossible for you to refinance or sell it. And even worse, they could garnish your wages as well.
Our SBA Loan Debt Workout Solution
At Second Wind Consultants, we are experienced SBA loan workout consultants. We’ve helped hundreds of clients reduce their personal guaranty obligation to what we call “affordable losses” and we have secured no interest payment plans for these Offers in Compromise, when needed.
It all can be worked out, even your personal guaranty.