The Best Things about SBA Loans
SBA loans actually are made to help any small business to start and get 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 actually very helpful for 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.
In case you are unable to make the necessary payments, the lender starts their collection process as what was being stated on the loan agreement. It likewise includes the sale of the assets which you used for collateralizing the debt. This likewise includes business assets and if you ever get much larger loans, it could even include 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.
Once that the lender has been paid, you are then going to deal with the SBA. You will be able to acquire a notice that comes from the SBA that explains to you that you will have to pay the remaining balance or that you should present an “offer in compromise”. It means that in a situation to where the SBA is going to review your financial situation and also accepts less than what is required. The secret in this case is where you should present a settlement amount which is substantial but needs to be sustainable as well. The SBA does not have any interest with the payment plans that you can’t meet.
In case the SBA accepts your offer, everyone will surely be happy as long as the repayments were met. If ever the SBA rejects the offer, you get an opportunity to recalibrate and be able to submit again. There are instances sometimes where the SBA sends the account to the treasury department. In such cases, the treasury department have different options.
You may have the option to settle your loan with the treasury department, but this can be a tedious process. This in fact is why it is far better to look for early solutions when the loan is still at its original lender.
Once you have settled the debt, you can then move forward and then focus to your financial health recovery.