It reaches a point in life when you find the need for a quick loan. People usually seek loans in times of financial despair when they need to settle medical bills or any other emergency. All in all, the above mentioned is a need that cannot get quenched by any other thing other than money. At the end of the day, you always go for a loan that is reliable, and that has low-interest rates, a perfect example being the SBA loan.
In as much as you feel proud of accessing a given loan, you are always in a constant fear of repaying the lender in the set time. Because of financial constraints, you find yourself defaulting on the loan. Below is an extract of what will happen to you if you default on the SBA loan. As a defaulter, your case gets scrutinized in great detail since the loans get usually funded by the Federal Government.
When you default, the lender which is usually a bank directly contacts you via direct mail or through a phone call. If you fail to respond to either form of communication, the bank then moves to collect their loan through the provisions made under the SBA loan agreement. Based on the items listed on the agreement, you are compelled to sell assets you put as collateral to raise money for settling the loan arrears.
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When you fail to accept the SBA loan agreement, the local bank makes efforts to get hold to some of your property. As an SBA loan defaulter, you will be required to pay the loan arrears in full, the interest, as well as miscellaneous expenses.
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The IRS comes to the assistance of the bank when you fail to meet any of the above demands. Through an Offer in Compromise agreement, you, the IRS, and bank enter into an arrangement on how you will repay the loan arrears. Before such an arrangement takes effect, the IRS analyses all your previous tax and financial reports to assess your worth. Through IRS, you can repay your loan in installments. When the SBA lender rejects your Offer in Compromise request, the only option you get left with is to use the United States Treasury Department as leverage.
When you default a loan knowingly or unknowingly, always be ready to face the consequences. Hence, with SBA loans, there is no escape.