So after months, and maybe even years, of hard fought negotiations, you finally got your SBA loan settlement approved. Hooray! Time to pop the champagne! Oh, wait. Not yet! Once you get word that the approval has been granted, it’s important to take a few steps to make sure this plane comes in for a soft landing.
1) Make sure all the terms are documented in writing. This is not the time for verbal promises. When someone comes knocking on your door for payment on the SBA loan that you THOUGHT you settled, you need to proof that the debt was settlement.
2) Have an attorney review written settlement documentation. My job is to negotiate the settlement, but I am not an attorney, and therefore I always strongly suggest that you have an attorney review all legal documents. There is a lot of money on the line, so paying a few hundred dollars to ensure its properly documented is usually well worth it.
3) Ensure that both the SBA and the bank have approved the settlement terms. In some cases, banks will defer to the SBA and go along with whatever the SBA agrees to, but that doesn’t mean that it’s not important to get it in writing that the bank is on board. The last thing you want it to remit a payment for a settlement, only to find out the bank still wants money above and beyond the settlement.
4) Make sure you can make the settlement payment on time. Banks and the SBA will often give you more time than they initially state if you have a good reason. It’s much easier to get extra time by asking at the time of approval than it is to ask for more time at the last minute (then toss and turn all night awaiting an answer).
Overall, getting news of a settlement is certainly an exciting event, but in football terms, it’s not a touchdown. It’s more like being on the 1 yard line and getting ready to punch it into the end zone. Not taking proper steps to document the settlement would be much like fumbling just be the score, so make sure you don’t celebrate too early!