SBA loan default

What is the name of your state (only U.S. law)? Maine

I have a SBA backed loan of $220,000. My store has closed and I put bank on notice that I was unable to make payments. They are waiting for 90 days to pass to start actions. In the meantime I am trying to sell and making a payment when I can.

Once it is foreclosed on and the property is auctioned what is the bank's remedy to get the rest? I have a personal guarantee and I have $10,000 to $15,000 in home equity. Is this the maximium they can go after or can they attach future earnings as part of a court judgement.

smills48 said:

What is the name of your state (only U.S. law)? Maine

I have a SBA backed loan of $220,000. My store has closed and I put bank on notice that I was unable to make payments. They are waiting for 90 days to pass to start actions. In the meantime I am trying to sell and making a payment when I can.

Once it is foreclosed on and the property is auctioned what is the bank's remedy to get the rest? I have a personal guarantee and I have $10,000 to $15,000 in home equity. Is this the maximium they can go after or can they attach future earnings as part of a court judgement.

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Say goodbye to your future earnings.

There is a process known as the "SBA Offer In Compromise" or "OIC" that will allow you to make a settlement offer. How much you can settle for will depend on the specifics of your personal financial situation, but overall the SBA is willing to consider a settlement of your personal guarantee if it's warranted.

An OIC can very often be accomplished with no litigation or lawyers for either side. It's a great alternative to wages garnishment, judgments, and filing for bankruptcy. Anyone who has defaulted on an SBA loan should look into the OIC option. The SBA is very fair and reasonable in most cases.

It's important to remember that your bank is likely going to be reimbursed by the SBA for the majority of your loan balance, so your OIC will need to be approved by both the bank and the SBA before a deal can be finalized.

For for info, I've written over 60 articles that relate to SBA default and settlement, and they are all on my website. I don't want to break any self-promotion rules on this forum by listing my web address, but if you want to find my site just google "Jason Milleisen SBA" and you will surely find my site.