SBA Loans: What Happens When You Default & How an Attorney can Help

Taken a Small Business Administration (SBA) loan and can’t repay? You immediately need the guidance of a SBA attorney specializing in business loans and debt relief. He or she can help you weigh your options and guide you in the next best step. 

SBA loan attorneys are well versed with the alternatives available for loan defaulters. They know how to protect their clients from the abusive practices deployed by third-party debt collectors. The attorneys are committed to protecting the rights of their clients at a time when the collectors leave no stone unturned to squeeze out the last dollar from you. 

SBA loan lawyer can help with the following types of SBA loans: 

• Microloans: These are short-term loans below $50,000.
• Disaster loans: These include Business Physical Disaster Loans, Home and Personal Property Loans, Military Reservists Economic Injury Loans, and Economic Injury Disaster Loans.
• CDC/04 Real Estate and Equipment Loans: These loans help to finance assets of higher costs.
• 7(a) General Small Business Loans: These are the commonest type of loan. They also include special loans like SBA Export loans, Community Advantage Loans, Rural Business Loans, Advantage Loans, and CAPLines. 

SBA loans are backed by federal government, yet… 

SBA loans have the backing of the federal government. This may seem to be an attractive option, but not really. This feature does not, in any way, help you when you are unable to pay the loan. 

The feature only means that in case you default on your loan, the government will pay the loan to the original lender for you, but then you must pay to the government. 

So, in any case, you must pay the loan. 

At the end of the day, you become a debtor to the federal government. To put it in other words, the federal government, by backing the loan, protects the lender, not the borrower. 

The risk of SBA loans that are personally guaranteed 

In case of a personal guarantee, the debtor’s liability extends beyond his or her business. Now your personal assets or income are at risk! 

The SBA has the power in this case to put a levy on the debtor’s bank account or a lien on their property or garnish their salary.   

This is not all. The SBA, under the Treasury Offset Program, can garnish the following: 

• Your payments from social security benefits
• Your payments that arrive to your business from vendors, contractors, or customers
• Your tax refund checks
• Your retirement payments and federal employee benefits money
• Your military retirement and benefits money

A competent SBA loan attorney can help you come out of this debt trap and safeguard your rights. Various debt relief alternatives are available to loan defaulters. Your lawyer can help you choose an alternative, depending on your case. 

Remember, SBA loan does not come under SOL (Statute of Limitations). 

In case of loan default, the SBA can send your case to the US Treasury of Collection. In this case, their collection attempts can extend beyond the SOL of six years.

Consult one of the best SBA loan attorneys today and gain control of your loan default situation as fast as possible.