Are SBA Loans Helpful?
SBA loans are made to help small businesses for them to get up and running. This can actually be risky, which is why a federal government will help entrepreneurs who could not get a loan in any normal circumstances. This is in fact helpful to our economy.
The SBA in fact does not make the loans itself, but it actually makes it possible through giving guarantees on the loans that are made by other lending institutions. The thing that happens in case of a default is to where the lending bank contacts you and then explains the details about the default and to how you could give remedies to it.
If you are unable to make the payments which are necessary, the lender is going to start on the collection on what was being agreed on the loan. It likewise includes the sale of the assets which you used for collateralizing the debt. It also includes the business assets and when you acquire larger loans, it could even include your properties like your home. The lender may actually close the business and they could also foreclose the property.
When it reaches a point where the lender had used all of the options on the recovery process, they can actually make claims to the SBA. During this time, the SBA guarantee kicks in and that the federal government will be the one to repay the share of your loan for you.
After the lender has been paid, you now will have to 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 actually has no interest with the payment plans that you could not meet.
If the SBA accepted the offer, all sides will be happy because you could meet up with 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 also cases sometimes where the SBA will send the account to the treasury department. In such cases, the treasury department have different 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 on the debt, you will be able to move forward again and focus on the recovery process of your financial health.