SBA Loan Default Settlement & Workout


Alright Let's demystify this whole SBA guaranteed loan thing

Nobody really understands it until they get deeply mired in it You take out the loan, you don't know what it is let me explain to you you're going to pay about 3% of the loan value to the SBA for a guaranty Now the guarantee is not for you the guarantees for the bank so how about that? you're paying so that the bank is guaranteed they get their cash from the SBA It's the way it works it's the only reason we're going to get the loan or else the bankers are going to give it to you so it's a fair deal All right so you took out a million-dollar loan the SBA gave it to you you gave them 30 grand that's the fee and you on you go and you're going to default and now you've got an SBA work out okay if you did not call us here's what will happen in order for the bank to get their guarantee and this is what's driving them their guarantee in order for them to get it they must liquidate the collateral that's what they must do and they're going to because they want to get their guarantee obviously it could be 7 or 800 or 900 thousand depending upon the contract so they sue you they foreclose on you they drag your collateral to the auction block they sell it they probably lose money on it but they don't care because they have to do it they put you out of business they've driven you out if they sell everything you get a pennies on the dollar credit for it then they get their guarantee from the SBA so on that million-dollar loan they got 50 grand so now the SBA knocks on your door and says hey yours 950,000 so what's up and they make demand no you don't have 950,000 you just got cleaned out you know if anything so it's a problem but they are not a bank they are the government in there there to support high-risk small business so they have another program it's called offer in compromise now we must be clear about it the SBA is tough they are not easy they like the IRS there they both emerge from the US Treasury Department of Justice same fiber and they're not there to be good guys they're there to collect now the SBA though has a little bit of heart a little bit and they have a forgiving component and it's good so they'll say make me an offer offer and compromise now they expect that offer to be sixty seventy eighty percent of the debt which is it likewise ridiculous it can't be done you all nine hundred fifty grand sometimes no rule here sometimes they'll allow us to finance it over a period of time 125 years without interest so now maybe all of a sudden it's capable of spending a little bit more but it's still not a good plan now we on the other hand are very good at negotiating successful offers in compromise and we know how the equation works we know how they evaluate your value we know what they will accept and it can be as little as five or ten thousand and as much as seven or eight hundred thousand on that 950,000 all alone it depends upon your specifics so I can't generalize all I can tell you is that we can definitely get you the lowest that they will allow given their guidelines and we know them and you don't so any attempts to do a workout on your own I assure you will the result in far greater loss and cost you than if we do it now I hear often long I have my attorney to it so I asked a very simple question well how many SBA workouts has your attorney done and I know the answer it's always none so how is he going to know how to do this if he's never done one and if he does do this one he's going to learn on you and frankly until you've done 20 or 30 or 40 and you've been rejected 20 or 30 or 40 times and you actually talked to them 20 or 30 or 40 times and figure out what's going to work and end up getting then 10 or 20 or 30 successful ones you have no idea what you're doing so yes talk to your attorney in your accountant and do it yourself if you want but understand you're going to pay me many times more than if you allow seasoned professionals that specialize in this to do it the offering compromise is part science and part art form the science is important the art form is as well but most important is the experience of knowing what works and what doesn't work and there's only one way to get that that's by doing it so the SBA guarantee offer and compromise tied in with the bank liquidating the collateral it's all very complicated and if not done right there's a lot of loss if done right the way we do it the business survives you pay what we call affordable losses on your guarantee the jobs are saved and everybody gets to play another day the bank gets paid off and is an interesting statistic this is great I love this one I never believe it but it's true so every year the statistics are out or what the SBA losses and the amazing thing is and it's almost unbelievable but it's true they lose less than 2% of the loans a year less than 2% to staggering successful oil program now remember what I said your fee is three percent so the reality is even the SBA doesn't lose money because the fees outweigh the cost of their losses three percent is more than two percent so they're collecting more than they giving out plus they're not giving a hundred percent out they're only giving 70 80 or 90 and only of the loss not of the whole loan so at the end of the day the SBA's hole the bank is in the black you walked away without paying the whole thing your business survive everybody won it's an amazing thing

Source: Youtube


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AJ

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