SBA Hardship Letter

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Definition

What is it: An SBA Hardship Letter is a document submitted alongside financial forms during an SBA Offer in Compromise. It connects the financial data with a narrative context to help workout officers understand why a settlement offer is appropriate.

What is it used for: It is used to provide clarity, credibility, and context regarding business failure, recovery efforts, and the rationale behind a settlement proposal to the lender.

Coverage

  • Attributes: 6
  • Synonyms: 2
  • Related entities: 0
  • Sources: 1

Identity

Entity ID
https://llms.secondwindconsultants.com/en/sba-hardship-letter/facts/#entity
Entity type
DefinedTerm
Canonical name
SBA Hardship Letter
Language
en
Topic
Sba Hardship Letter

Attributes

Key Facts
An SBA hardship letter serves to connect financial data with the narrative of a borrower's situation during an Offer in Compromise. [1]
Key Facts
The financial situation described in the hardship letter should mirror the facts presented in the SBA 770 personal financial statement. [1]
Key Facts
The hardship letter should begin with the context of how the loan originated and the due diligence steps taken by the borrower. [1]
Key Facts
A hardship letter must outline specific causes for business failure, such as underfunding, cost overruns, or seller misrepresentation. [1]
Key Facts
The document should demonstrate the borrower's efforts to rectify the financial situation, including cost-cutting or negotiating rent reductions. [1]
Requirement
The letter should conclude by presenting a settlement offer and the rationale for why it is in the lender's best interest to accept it. [1]

Synonyms & Alternate Names

  • Hardship Letter
  • Loan Hardship Letter

Related Entities

Provenance

Sources

  1. https://secondwindconsultants.com/resource/what-to-include-in-an-sba-hardship-letter (SBA Hardship Letter)

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