When it comes to getting settling an SBA loan default, the consensus is mostly true. It is an extremely difficult thing to do, and many people cannot get the job done. A small business must have an attorney who knows these waters and who can navigate around the cumbersome and notorious weight of the Offer in Compromise.
What is the Offer in Compromise?
The Offer in Compromise is a series of documents that list out the various standards and demands of the Small Business Organization to settle SBA debt The organization will settle, but it is a matter of clearing out all the demands- and it is a long list.
What does the Offer in Compromise demand?
The documentation states that the company cannot be operational while it is undergoing a settlement. This puts a major wrench in a company’s ability to retain business and pay current expenses during this process. If this is done, though, it goes far in finalizing the debt payment. It is undoubtedly one of the tallest obstacles facing a small business.
What are some other demands?
The SBA will also demand that the business assets are concurrently liquefied. This means that company can’t handle any long-term investments, such as stocks. It is another crippling move against the company, but one that must be followed to specific detail. One breach in this area could invalidate the whole process and cause a potential rejection.
The SBA also demands a strenuous effort from the bank. The problem here is that it introduces an entirely new party to the proceedings and one that can’t always be controlled. Only an attorney can apply the right kind of legal pressure towards a bank to do their job to the fullest and in a timely fashion to meet the Offer in Compromise.
Clients are able to clean out 90% of their debt if they can follow the above metrics. But, that is not all. There are many other demands in the Offer of Compromise. They must all be settled to complete the process of getting out of SBA debt. It can be done, but not without the right team.