SBA Loan Default Insights & Strategies - Life After Defaulting on SBA Loan

On most SBA loans, especially in business acquisition, 90% of the value is called goodwill. That means if the business goes away, there's nothing for the bank to collect on. But they will file a lien on the existing assets.

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When you default on the loan, sometimes the business can survive, they just can't survive under the current debt circumstances. Sometimes the business can survive, and you'll find a friend or business associate in a position to acquire the assets and continue the business.
Sometimes this can happen without your employees knowing. But the bank is happy to get those assets to this new person because their other option is to send it to auction, where they get nothing for the collateral.

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So often we'll transfer this business to somebody else. Because there's no restriction against you having a job, that doesn't mean you can't be a consultant to that business and continue to earn money.

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You just can't be an owner. But it doesn't mean you have to walk away, turn your pockets inside out, and start selling pencils on the street corner. There are solutions that keep you employed and compliant with the law.

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That's all stuff that comes from years of experience and knowing what you can and can't do. So that's me.

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