Getting my Reserve Payment back from SBA Loan

[Fmeroney]

Boston, MA

My wife and I opened a franchise and one contingency of the loan is providing 60k in “Payment Reserve”. Fast forward to 3 years later and we have not seen any of it back. Now we technically have not met the conditions of the refund of the reserve however if we want to reinvest in our business by purchasing new equipment or vehicles it makes it impossible to meet those conditions.



My question, can I get it back due to a technicality that there is not full language stating all the terms?



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Here is the exact except:

24-month payment reserve with half to be released after 1.25x DSCR for business and globally to be tested upon 1st full year tax return. Second half to be released upon similar results for 2nd full year of operations, to be tested upon receipt of 2nd year taxes.



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Now we passed our second year... so there is no language stating what happens if we are in the third yeah and have not received the refund. There doesn’t seem to be anything saying “What happens” if we don’t meet the conditions of year 1 & 2 tax returns..

 

[PayrollHRGuy]

There is no way you are going to get a intelligent answer from anyone that hasn't read the full franchise agreement. Contact a local attorney.

 

[Fmeroney]

There is no way you are going to get a intelligent answer from anyone that hasn't read the full franchise agreement. Contact a local attorney.

This has nothing to do with the franchise agreement. This is about an SBA loan between me and the bank

 

[PayrollHRGuy]

You do realize that "SBA" "bank" or "loan" appear anywhere in your original post?

 

[HRZ]

In the heading?

 

[Zigner]

You do realize that "SBA" "bank" or "loan" appear anywhere in your original post?

*Don't* appear

 

[Zigner]

If you haven't met the conditions, then you don't get it back. Once you've met the conditions for the set number of years, then you should be able to get it back. Please consult with a local attorney who can review the full loan agreement, as that is beyond the scope of this forum.

 

[FlyingRon]

If the loan was less than $350,000, the SBA doesn't set the terms, the bank does exclusively.

What did you say when you asked the bank about the fact that you've met the requirements (presuming you have) for the collateral requirement?
The banks under no obligation to just give you the money. It's in an account of yours. It may be that it's just sitting there waiting for you to request it.

 

[quincy]

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