For anyone who has kids, you can relate to this article! You know how you have asked your kids not to leave their dirty socks on the floor a million times, yet you know tomorrow you are going to walk in their room and find dirty socks on the floor? That’s how I feel about preaching the concept of being proactive about pursuing an SBA Offer In Compromise.
For a number of years, I’ve told any borrower who would listen that being proactive about your SBA OIC can mean the difference between smooth sailing and the perfect storm. So what exactly does it mean to be “proactive”?
1) As soon as you fall behind on payments, sell your real estate, or close your business, you need to be in constant contact with your bank and convey your desire to submit an Offer In Compromise. Do NOT wait for them to call you. Call them. If they don’t call back, call them again. Email them. If they don’t email you back, email them again. If you think you are buying yourself time by sitting back and waiting, you are setting yourself up for a difficult situation. Some bankers, you see, are completely overwhelmed with files. If given the chance, many will simply pass your file over to the SBA or the US Treasury and let them deal with the collection of your loan. If you get a letter from a collection company, life just went from bad to worse.
2) When your banker asks you for paperwork, make it a priority. I have a client who has told me three times that his tax returns will be ready “tomorrow”. That was 6 weeks ago. I can see it coming already. His bank is going to get impatient, close their file, ship to the Treasury, and the likelihood of a settlement will decrease dramatically. I’ve begged and pleaded, but my client just doesn’t get it. He thinks the bank will give him all the time in the world. If someone was going to give you $500K if you get your paperwork in on time, wouldn’t you drop everything to do it? Of course. So why, when the opportunity to have $500K forgiven, do some business owners fail to grasp the urgency of the situation?
3) When your banker says “jump”, you say “how high?”. There are times in life when you need to swallow your pride and do something not because you agree with it, but because that will get you what you want. It’s true, some bankers will sit on your file for 6 weeks, and then when they finally get around to it, request additional information to be submitted within a few days. Is that fair? Not really. But this person holds your fate in their hands, you should make it your life’s mission to make their life as easy as possible.
Distressed Loan Advisors (http://www.JasonTees.com) offers expert advice about dealing with SBA Loan
Default and Forgiveness, and can be reached at 1-877-436-4533 or firstname.lastname@example.org.