SBA Loan Default

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Latest post Thu, Oct 8 2015 11:35 AM by ca19lawyer2. 4 replies.
  • Mon, Mar 11 2013 3:35 PM

    • six98
      Consumer
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    • Joined on Thu, Oct 27 2011
    • IA
    • Posts 2

    SBA Loan Default

     

    I will try to give you a brief overview of the situation that my wife and I are in. In 2002 my wife applied and received an SBA backed loan to purchase an existing tanning salon 3years after that she had obtained another SBA loan to fund the expansion to a second location. After being open at the 2nd location for about 2 1/2 years she had to close that location down due to lack of business and issues with the landlord. While it was a struggle to keep up with payments on both SBA loans she was able to make the loan payments with what the original location was providing. Then in October 2010 while closing the store my Wife was a victim of a strong arm robbery during this robbery the robbers stole money from the business along with money and jewelry from my Wife. This robbery caused my Wife to be quite fearful while working in the business, and she decided to adjust her hours so that she could close the business while it was still in the daylight. During the next year she was able to keep up with the loan payments and then in September 2011 her business was damaged by a small fire that ruined all of her tanning equipment and computers. Her intentions were to reopen the business as soon as possible, and was working with the insurance company and tanning bed manufacture to try to keep her down time to a minimum. Then she was contacted by [a bank]and was told that since she had trouble in the past with keeping current with her payments that they were going to take any of the insurance money and put it towards paying off the first loan. The bank did take the insurance money that was to purchase the new equipment which basically put her out of business and no way of paying off the remaining $70,000.00 on the second loan. During this past year she has defaulted on this loan and it went to the Dept Of Treasury which has turned it over to collections by Performant Recovery. My question to you is there any legal action that can be brought against the bank for calling in the loan early and preventing us from reopening and having the opportunity to keep paying on the loan. It seems to me that the bank was not willing to work with us because the loan was backed by the SBA. With all that has happened my Wife’s health has deteriorated to the point to where she is being treated by a physiologist for depression and PTSD from when she was robbed and is unable to work.

     

  • Mon, Mar 11 2013 3:53 PM In reply to

    Re: SBA Loan Default

    six98:
    My question to you is there any legal action that can be brought against the bank for calling in the loan early

    Probably not and the reason is that most loans are written that if the borrower defaults the loan can become immediately due.   The answer is in the loan documents she signed.  The terms of being able to call the loan in early are outlined in the contract itself.  If they have an acceleration clause then no, she would not be able to sue because they exercised it.

    six98:
    preventing us from reopening and having the opportunity to keep paying on the loan.

    What prevented her is a history of paying late.  The bank had every reason to be concerned.  While she certainly had a run of bad luck, more than half of all new businesses fail in the first five years so the odds were against her.

    "That's just my opinion, then again I might be wrong."  Dennis Miller

     

  • Mon, Mar 11 2013 3:58 PM In reply to

    Re: SBA Loan Default

    six98:
    My question to you is there any legal action that can be brought against the bank for calling in the loan early

    Probably not.

    You'll have to read the loan contract to see what constitutes default and loan accelleration.

    I imagine that the bank took the insurance money because it was listed on the policy as under the loss payable provision. Again, you would have to read the loan contract to see if the bank had that option when the insurance was due to property loss.

    six98:
    preventing us from reopening and having the opportunity to keep paying on the loan.

    The bank didn't "prevent" anything. Sorry, but your wife fell on hard times, went out of business and defaulted on the loans. That's not the bank's fault.

    six98:
    It seems to me that the bank was not willing to work with us because the loan was backed by the SBA.

    That has nothing to do with anything.

    six98:
    With all that has happened my Wife’s health has deteriorated to the point to where she is being treated by a physiologist for depression and PTSD from when she was robbed and is unable to work.

    Also not the bank's fault.

    If you and your wife don't understand the loan contract please take it to a lawyer and review your options.

    I have read that SBA loans might be dischargeable in bankruptcy. Think about that.

    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
  • Thu, Oct 8 2015 11:35 AM In reply to

    Re: SBA Loan Default

    charlesus:

    SBA loan is designed to enable businesses to grow.If you are starting a business and dont have the actual money you can go for SBA loans before going research about them better . for more details do visit here

     

    1. https://fidelitybankofflorida.com/BusinessBanking/SBALoans.aspx 

     

     

    It takes a special kind of moron to resurrect a 2 1/2 year old post for the sole purpose of posting spam that doesn't have any relevance to the purpose of the original post.

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