Yes, the seemingly impossible is possible! SBA workouts can go very well indeed. Two recent examples.
We recently closed a number of SBA guaranteed loan workouts with stunning conclusions.
The first reducing a client’s debt from $1.8 million to $800,000! A million dollar reduction in debt! Much can be accomplished with a viable workout strategy.
We did it again! Another successful workout with over a million dollars of forgiveness with an $80,000 payoff!
…and then again, a 1.1 million dollars debt worked out with a $75,000. payment!
Another interesting result was with a client who owes $1.7 million, and needed time to re-organize as we worked out his debt, and while we certainly intend to submit an aggressive Offer in Compromise, we needed a few more months so I successfully negotiated a $100. per month payment for 6 months…Wow. Anything can be accomplished….We will workout the debt as well, when we are ready.
Of course, we have many many smaller loans that are handled in a similar manner. We also recently resolved a $348,000 defaulted loan for $12,000. although in this case the business was not worth continuing, so it was the personal guaranty that we resolved without preservation of the business assets.
That’s the point of all my work, protecting assets, reformulating today’s debt so your business is able to support today’s business environment and conditions, which are much different then what they were three months ago, a year ago, many years ago, when the debt was incurred and the condition of our economy was very different and the borrower had much higher gross revenues and of course stripping of the debt and resolving the personal guaranty.
The right workout affords the business an opportunity to keep running, able to support its debt while operating at break even, or better without the burden of debt service, allowing the new business an opportunity to pursue ways to grow and expand in today’s economy without excessive debt.
This down economy is not a temporary speed bump that’s likely to correct itself in a few months if only we can hold on, it is a systemic change in our economy. What we have today is what we will have to contend with for a long time before our economy can correct itself, and then it will not be a rapid return to where it was, but a slow growth out of the deep hole we are in. Debt must be reduced to survive.
I see a ten year cycle before we return to where the downturn began, so batten down the hatches and do your workout so that you too can focus on business development. Attempting to survive with an impossible debt structure sinking your ship is not a winning strategy.
The mission is first a debt workout, then to tighten up the business, and add the systems and strategies necessary to support survival and growth in a long term down economy. Only those businesses managed very well, with appropriate work incentives, financial reports, training programs, adequate profitability, etc., will survive and prosper. It is not enough to simply cut your debt and continue to manage as before, both ends must meet in the middle. Debt reduction and management improvements, both are required to survive and prosper in today’s down economy.
Call my office at 413-584-2581 if you’d like some help with this. Norm will arrange a no obligation teleconference for us to discuss your issues.
Don,
I believe you’ve been in contact with my wife Casey. I have the two loans for $60,000 and $40,000. One is secured by our condo. At this point the Bank has hired attorneys and we received a summons for the debt we owe. We have put in offer and compromise letters, but they were never answered. I contacted the bank today, but did not talk to the person in charge since she was not in the office. I did leave a message asking to see what became of the offer and compromise. I am inquiring to see if we should hire an attorney. What do you think is the best courser of action at this point? Thank you for your help. My wife and I appreciate people like you who are helping out those who need it and don’t know how to handle these situations.
I am a guarantor for a $250,000 SBA loan. The business is in default, and is going to file bankruptcy. The bank has copied me on the default and demand letters. The bank knows I could come up with the money if they put me on demand. But I would like to lessen the blow. Have you seen any lessening of amount due, when the bank knows the guarantor could come up with the funds? Do you think they would negociatie the amount down with the loan owner when they know the guarantor has the resources?
Jenny I do not believe you an negotiate a reduction if you have the resources to pay.
Jenny, what possible reason would you have the business file a bankruptcy, when yo are still the guarantor, what will be accomplished? Nothing!
I talked to you before. I received $100,000 from Sam’s Club. Gave Shore Bank $20,000. They called the loan! Came and took pictures of the equipment. My Attorney said DO NOT FILE BANKRUPTCY. He will file insolvency letters with the court. I have a $700,000 SBA 7A loan – $10,900 per mo. Can’t pay because customers are not ordering or sporadically ordering. Bank won’t subordinate the debt to investors (I have 7 – one which ‘broke the law’ and gave me money for Sams Club). They’d rather see me out of business. Attorney setting up a new business. Can you help?
absolutely…I recall our calls, lets talk I can help you.
Lots to talk about, call Norm at 413-584-2581 and he will arrange a tele-conference.
I signed as a guarantor on a $75K SBA loan my Ex led (I was not in the business). Shortly after, we divorced where this specific loan & business was awarded to ex. The buisness went under 1yr after the divorce. Business assets were liquidated by the bank. I am unaware of exact dates.
I have a “latest address” on file for ex, but thats all. Ex has had several charge-offs on credit due to personal suits with business, and has a $24k AG charge for neglected child support.
I received a letter from the bank’s lawyer (in addition to my ex and the business) attempting to collect the $52k defaulted loan. My ex stated he would work out the issue. Despite my hope, I received another letter from a creditor (Progressive Financial Mgt Services) for $70k.
I am a single parent of 2 little ones, own my home, am a contractor and have a secret clearance (and want to avoid bankruptcy).
What should I do or how much should I expect to pay?
Can you negotiate a loan workout if you do not currently have funds to pay it off? My husband and I have a failed business with personal guarantees. We are preparing to close the business and seek alternative employment. We have no money to pay off this loan or even a reduced loan until we are gainfully employed.
In Nov of 2008 I signed a personal guarantee on a 220K SBA loan for two franchise deli’s I owned. I do not work in the stores and hold a full time corporate job. One year later I closed one of the locations because the lease renewal terms were such it was not worth keeping the business open. The bank is aware of this. The equipment is in storage. The second location has been struggling and I have been paying the note out of personal income from my job for the past year. The business is in such a shape that in addition to the note I am now paying the rent also out of pocket. I have 3.5 years left on the lease where I also signed a personal Guarantee.
I am thinking to close down the store. What are my options? How can I release myself from the lease and how can I settle the SBA loan at a smaller amount?
I have 3 Rental properties which all have a loan against them. I don’t want this to become a snowball which would force me to file bankruptcy or sell/lose my real estate as well. Any advise is much appreciated.
Definately get an answer about your offer in compromise with the SBA. You are entitled to make an offer and they cannot collect while the offer is pending…so you must be strong and assert your rights and demand the offer be sent to the sba and all collections cease until they respond. Are the assets of the business gone, liquidated? if not thats a problem, Is the condo a direct asset of the loan if so that too is a problem…perhaps you should call me so we can discuss this a little more clearly with some more detail. Call Norm 413-549-2966 at my office and he will arrange a no obligation discussion.
don