Every so often, I peruse the website of competitors to see their “pitch”. You know what I mean…their case as to why they can help a struggling borrower better than me and everyone else. This morning I was reading the site of a law firm who was playing the “we’re highly trained ninja lawyers who possess the ability to pillage and destroy all SBA debt” card. Here are my “take always”:
1) It’s unclear to me how long they’ve been doing this, or what kind of results they’ve actually achieved for their clients. I suppose if my experience was limited, I’d avoid sharing that info too.
2) There is LOTS OF IRRELEVANT jargon designed to convince people that a non-attorney simpleton couldn’t possible understand the delicate intricacies of SBA settlements. It looks to me like they found the SBA SOPs (Standard Operating Procedures) and wrote a book report about them. Lots of fancy language, but few explanations in terms of what it means to you, the borrower.
Here’s a good example of jargon that sounds good in theory, but in reality applies to very few borrowers: “while you don’t need an attorney to represent you, a non-attorney cannot represent you before the SBAs Administrative Office of Hearings and Appeals.” If I didn’t know any better, I’d be impressed. But I do. So I’m not. The truth is that 90% of the time we are able to work out a settlement directly with the lender or directly with the SBA. And beyond that, I’ve never heard of a borrower having their debt settled as a result of going this route. So while their advantage over me sounds good, but it’s not likely to be a factor in the vast majority of cases.
3) There is a MAJOR FACTUAL ERROR in their FAQs section. They claim that an SBA loan can rarely be settled unless the business is closed. As I noted earlier, it’s clear that they read the SBA rules, because that is actually what the rules say. But the fact that they say this shows their lack of experience. There is one huge exception to the rule that the business must be closed. It’s called a 504 loan. If the real estate associated with an SBA 504 loan is sold, they WILL consider a settlement even if the business is still open.
4) They say “After you schedule an appointment, you consult with a dedicated SBA OIC lawyer who helps you through your legal battle.” Cool, but here’s the thing: most OICs are not legal battles. In fact, most settlements are worked out with no attorney involvement at all. At the end of the process, you can have ANY attorney review the settlement agreement and it will cost maybe an hour of billable time.
Here’s the bottom line, as I see it. If you were learning to hit a baseball, would you rather seek guidance from the guy who read book about hitting a baseball, or would you rather learn from the guy who actually played baseball? In case you missed it, I’m the latter. I worked for an SBA lender, so my knowledge goes beyond what you can find on the internet about the process. I’ve lived it, and know that there are differences between what’s written in the “rule book” and how the rule book is applied in the real world. But if you like fancy jargon, I’d be happy to throw out some nebulous yet useless terms that have little impact on your situation.