Want SBA Loan Forgiveness? Avoid these 5 Losing SBA Offer in Compromise Arguments (November 4, 2024)
In this article, Jason Milleisen, founder of Distressed Loan Advisors, discusses common arguments borrowers make that are unlikely to succeed in an SBA 7A loan offer in compromise (OIC). He emphasizes that these arguments will not help in convincing lenders to settle and clarifies that OIC is currently unavailable for EIDL loans. The five losing arguments Jason highlights are:
1. **Past Payments as a Justification**: Lenders focus on current financial capacity, not on past payments made.
2. **Personal Guarantees with No Involvement**: Signing a personal guarantee binds the individual, regardless of their business involvement.
3. **COVID Impact**: Most businesses were affected, so it’s not a special consideration.
4. **Ignoring Personal Financials**: Borrowers need to prove they cannot repay in full; lenders won’t negotiate solely for the sake of compromise.
5. **Appealing to Empathy**: Lenders prioritize loan recovery and may still foreclose if there is significant home equity, despite personal hardships.
Jason advises borrowers to present a realistic offer based on their true financial limitations and avoid relying on these ineffective arguments.
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