I have a current SBA loan which is in default by a couple of months. The business is under contract for sale at a much higher price then what I owe on the SBA loan. At the same time, I am applying for another SBA loan for another business. Does anyone have any information on whether the SBA will know that my current loan is in default and deny me the new SBA loan? The current bank that I have my SBA with 'says' that there is some sort of report that is sent to the SBA every month and that they have reported me as default in that loan. Does anyone have any suggestions? Should I just wait until my current SBA loan that is in default gets paid in full and then apply for the new SBA? Anyone ideas?
There is a lag, but yes the SBA will know if you are in default one a
different SBA obligation. Since you are going to sell the business anyway,
you should do whatever you can to get current on the loan.
Regards,
Jason Milleisen
Distressed Loan Advisors
Jason Milleisen, Founder, Distressed Loan Advisors
Both the underwriting bank and the SBA will do a background check and, if they already don't know, will find out about your default - if you have a UCC filed on your business - they will see the UCC then follow-up via that filing.
Your best bet would be to bring your current loan current - then try what you are trying - the SBA just recently sent out a reminder that the ARC program is still available to businesses struggling to make payments - might want to visit the SBAs website to find out more.
There are also DIP programs (debtor in possession) programs that could help you out - a web search would lead you to more information.
The chance that whatever bank(s) you apply for a new SBA loan don’t discover an existing SBA loan that is in default are remote. Particularly if you personally guaranteed the existing SBA loan - any bank’s normal due diligence will include reviewing your personal credit - and that SBA loan will almost certainly appear. I recommend that you wait until you bring the existing loan current before applying for a new loan.
DLA | Performer | 5/24/2012 - 3:24 pm
different SBA obligation. Since you are going to sell the business anyway,
you should do whatever you can to get current on the loan.
Regards,
Jason Milleisen
Distressed Loan Advisors
phanio | Contributor | 11/26/2009 - 8:32 am
CrestCapital | Creator | 11/25/2009 - 3:33 pm
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