SBA Default/Liquidation Questions - SBA Guarantee

searcher profile

April 07, 2025

by a searcher from California State Polytechnic University - Pomona in Pomona, CA, USA

Currently in default on an SBA 7a Loan. Hoping in the future to post full details on the process and cause of the default so the community can learn from what we have gone through.

I have some questions that perhaps the Searchfunder members might have some feedback on:

We believe the SBA lender acted neglegently through the default and liquidation process, resulting in the worst-case value being acheived for assets, among other negative impacts they made. Would there be any benefit in a borrower petitioning the SBA to have the SBA Guarantee declined, forcing he lender to take on the total impact of the defaulted loan?

Additional question; how soon should you begin the discussion of an Offer In Compromise? I have heard some handle this initially through the lender but I thought the OIC was handled directly through the SBA after the guarantee is finalized and the SBA takes over managing the loan.

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commentor profile
Reply by an intermediary
from Arizona State University in Houston, TX, USA
The only answer i have is to make sure you have competent legal counsel who has dealt with this in the past. I know a few attorneys who have done this, it is a horrible process and I wish you the best of luck on moving on to the next phase of your life. Note to other purchasers, make sure you have competent legal counsel to review all SBA documents before signing, not that you can change it, but you will know what you are signing.
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Reply by a searcher
from Texas A&M University in Austin, TX, USA
I have been through a similar process - I have an attorney that only does SBA workouts/OIC. Shoot me a DM, and I can connect you with them
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