Listmates,

 

I have a family friend looking for an attorney well versed in SBA Loans. The facts and circumstances are provided below:

 

Background:

An LLC, a New York-based custom metal fabrication company founded in 2012. During COVID, the business received an SBA Economic Injury Disaster Loan (EIDL) in the amount of approximately $67,400.

Due to prolonged business hardship, the loan became delinquent and was eventually transferred to Treasury collections. With penalties, fees, and interest, the balance increased to approximately $101,000.

The business submitted a hardship request to Treasury explaining ongoing financial distress and requesting that the balance be reduced to the original loan amount. Treasury agreed to reduce the balance to approximately $60,000 on the condition that it be paid in full within one year.

Unfortunately, the business does not have the financial capacity to satisfy that repayment requirement.

Relevant facts:

• Borrower: LLC (New York LLC)
• Original EIDL loan amount: approximately $67,400
• Current Treasury settlement offer: approximately $60,000 if paid within one year
• Business remains operational but is struggling significantly
• Business has few, if any, meaningful assets
• Applications for both a home equity loan and business line of credit have been denied (documentation available)
• The loan documents include a security agreement granting SBA a lien on business assets
• We have not identified a separate personal guaranty agreement in the loan package, but would like legal review regarding whether the owner may nevertheless have personal liability under the loan documents

Primary questions:

  1. Does the owner have personal liability under the EIDL loan documents?
  2. What options exist for negotiating further with Treasury given demonstrated inability to pay?
  3. Would dissolution of the LLC provide meaningful protection if no personal guarantee exists?
  4. If personal liability exists, what bankruptcy or restructuring options should be considered?
  5. Are there any Treasury, SBA, hardship, settlement, or Offer in Compromise programs that may be available in these circumstances?

 

 

 

 

Sincerely,

 

 

 

Dominick J. Callegari

 

______________________________________

Dominick J. Callegari, Esq.

President

CALLEGARI LAW, P.C.

4 West Main Street

Suite 212

Bay Shore, NY 11706

Ph: 1 (516) 820-0712

Email: dc@callegarilawpc.com 

www.callegarilawpc.com 

 

 

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