Your relationship with your banker with a defaulted SBA guaranteed loan.

It is very important.

Your relationship with your banker must be understood and worked effectively for your own best interests. In a defaulting situation with an SBA guaranty, you will at some point be making an Offer in Compromise to the SBA to workout your guaranty. They have he right to attempt tpo collect more themselves on your guaranty before they send you to the SBA, sort of double dipping as it is about your personal guaranty.

The application is delivered to the SBA through your banker and while your banker does not make final workout decisions, the SBA will ask for information and the bankers opinion regarding the entire matter as well a some detail.

It is my belief, based on many experiences that this opinion is very important and has great weight. Thus it behooves you to understand this and in the light of a very difficult situation, default and liquidation of your  business assets, it is necessary to manage this relationship as best as possible. This does not mean or require submission to the bankers every whim or order. In fact you may be best advised to resist his directions and do what is best for you.

However it does require you to communicate clearly and effectively but what you communicate and when you communicate will certainly be controlled by what is in your own best interest.

The important point is you must be pro-active with your communication, polite and honest, even if you disagree, but you sill must maintain the best relationship possible under the strained circumstances of default and liquidation.

Remember the bank has agreed to ‘exhaust its legal remedies to liquidate the collateral’ and the bank has no wiggle room here at all or it jeopardises its guaranty from the SBA, which the banker will not want to do.

In fact I find that in its effort to honor this directive, the bankers tend to be quite exuberant and usually over reacts to make certain it satisfies this requirement. Thus they appear to be unreasonably quite aggressive, and can raise your ire from their apparent unreasonableness resulting in an unworkable relationship which is not to your advantage.

Also remember if you are a reader of this blog you will know that there are effective workout strategies we can employ to protect your assets and reduce your debt and thus there is no need to ‘fight fire with fire’ instead we will intelligently work the matter out to everyone’s satisfaction as we ignore the bankers demands and implement a better result while maintaining a great relationship with the banker as this serves your needs well.

This is a very tricky negotiation, call Norm he will arrange a no obligation tele-conference for us. 413-584-2581.