The article below is the lightly edited transcript from the video above.
(Note: One point I forgot to mention in the video is that typically, if you bring in an attorney, so will the bank. That can get expensive quickly, especially if your attorney is learning about EIDL workout process and Offer in Compromise for 7a loans as they go.)
Hey guys, my name is Jason. I’m the founder of Distressed Loan Advisors. If you want to book some time with me regarding your EIDL loan or any other SBA loan-related matter, there is a link below where you can do that.
Click here to schedule time with Jason
Today, I wanna talk about SBA loans and what we’re calling SBA Attorneys or EIDL Attorneys.
I spend a decent amount of time online just sort of looking around, seeing what people are talking about, what they’re concerned about. And so, of course, naturally, a lot of the conversations that I see on various forums and message boards, like Reddit, for example, are people trying to be helpful and give each other advice. And one of the big pieces of information that I see people giving to others is basically, they ask questions and people say, “Well, you need an attorney.”
But here’s the thing.
I feel like that is a very generic piece of advice that I don’t think applies in every situation. And I will explain because I’m not saying that it doesn’t make sense to involve attorneys when it comes to either EIDL loans or any other type of SBA loan.
But I think there’s, what’s the best way to say it? You know, everybody has their lane. And sometimes it doesn’t make a whole lot of sense to try to basically drive in someone else’s lane.
And here’s what I mean by that. So yeah, if you’re getting sued, you absolutely need an attorney. That’s what attorneys do. If you’re looking for someone to give you a legal interpretation of a document or even to review a legal document before you sign it, certainly, you should have an attorney.
Where I start to think that people erroneously believe that attorneys can help is when people want to know what happens if I don’t pay my SBA loan back? What is the process by which the SBA will settle an SBA 7(a) loan? What is the process by which the Treasury will attempt to collect from you? And what are your options once you get referred to the Treasury?
So, you know, the last couple of things that I mentioned, none of it is necessarily in the wheelhouse of your average attorney. And I know that because I get a decent amount of referrals from attorneys.
So in other words, somebody goes to their local attorney and says, “Hey, I’m having problems with my SBA loan, can you help me?” And a lot of them, they just Google, you know, basically things about SBA loans, SBA loan default help, SBA workout advice, you know, stuff like that.
And they end up finding me, which says to me that these attorneys understand that while they understand the legal side of things, but they don’t have “deep in the weeds” experience when it comes to the actual practices of the SBA.
And so I guess all this is to say, do you need an attorney to help you work your way through the EIDL loan process or the SBA offering compromise process? I would say no. You need somebody who is experienced in that particular process. And don’t forget when it comes to 7(a) loans and settlements (and, hopefully one day EIDL loans), that the negotiation of a settlement is largely financial in nature. So we’re giving them personal financial statements, tax returns, pay stubs, bank statements, and we’re trying to boil down all that information to a number.
So, you know, there’s nothing about that that really (exclusively) requires any sort of legal skills. It’s really more about how is the SBA looking at specific situations or specific facets of your situation and what does that translate to in terms of an offer. And so that’s basically what I do. That’s what I excel in. That’s what I’ve been doing for the last 15 years.
So yeah, when people say, you know, I need help with my EIDL loan, I don’t think it’s generally correct to say, “Well, you have to have an attorney work on this,” because most attorneys haven’t dealt with loans who have been sent to the Treasury. So they don’t know those protocols. They don’t know the difference between what could happen and what will happen.
And that’s really what I explain to people. Yeah, sure, there’s a million different things that could happen. But here’s what I actually see in practice, and here’s what I’ve seen over the last 15 years. So that’s that.
The other thing that I wanted to mention is be careful. There are people out there, attorneys included, who are quoting people outrageous sums of money to do fairly simple things. The latest example was, I had a guy call me and say, “Oh, this attorney wanted to charge me, I think it was $9,500. And what he was gonna do was convince the SBA not to refer me personally to the Treasury, they’ll only refer my business.”
Now, that would be a great trick if there were a personal guarantee. But for this particular gentleman, the loan was under $200,000. It was to his LLC, and he had not personally guaranteed it.
The gentleman who owned the business couldn’t really explain to me, why is it that this attorney would need to charge $9,500 to convince the SBA not to send him personally to the Treasury when he didn’t personally guarantee the loan.
In other words, you don’t need to convince the SBA to do something when it doesn’t exist, right? Like that would be what I said to him was, “Well, that would be like him wanting to quote me $9,500 to tell the SBA not to include ME (Jason) in the transfer of his business to the Treasury.” It just didn’t make any sense. So just be careful.
And if you have friends who are, you know, some people are frantic, this is very much like a hair on fire situation, I get that.
But don’t make decisions out of panic or fear. Make informed decisions. There are certainly some things that are worth paying for, but just make sure that there’s really value being added there.
And I always try to do that, you know, ’cause I understand that my fees are not cheap, but I try my best to add a lot of value in the time that I give to people. That was it.
And then there was one more thing. Apparently people are starting to get, like robocalls saying you may be eligible to get up to 90% off your SBA loan payment. What that sounds like to me is somebody who is aware that the SBA pretty much automatically approves hardship accommodations and they’re trying to find people who don’t realize that.
And so they’re gonna charge them. I don’t know what they’re charging them, but basically they’re charging them to do something that the vast majority of EIDL borrowers can do themselves in like 10 minutes. So just be aware of people who are pitching services. ‘Cause you know, if they’re saying they can get it done for you, there’s a possibility you can do it for yourself for like next to nothing or for free.
So that’s it. That is the update. And my discussion with regards to EIDL and SBA loan attorneys and people that may be out there soliciting people to perform services that may or may not be needed or worth, um, the exorbitant sums that they’re charging. Thanks for checking in. We’ll see you next time.
Click here to schedule time with Jason
