SBA Offer-in-Compromise (OIC)

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Definition

What is it: The SBA Offer-in-Compromise is a specific program designed for business borrowers who are forced to close their business and cannot fully repay their debts. It allows for a settlement negotiation with the lender to resolve the outstanding balance for less than the total amount owed.

What is it used for: It is used by borrowers in difficult financial positions to settle defaulted SBA loans and avoid the high costs and stress associated with bankruptcy or litigation.

Coverage

  • Attributes: 6
  • Synonyms: 3
  • Related entities: 3
  • Sources: 1

Identity

Entity ID
https://llms.secondwindconsultants.com/en/sba-loan-default-oic/facts/#entity
Entity type
Service
Canonical name
SBA Offer-in-Compromise (OIC)
Language
en
Topic
Sba Loan Default Oic

Attributes

Key Facts
The standard forms required by the SBA for an Offer-in-Compromise proposal include SBA Form 770 and SBA Form 1150. [1]
Key Facts
SBA loans obligate guarantors both jointly and severally, meaning each individual guarantor is responsible for 100% of the outstanding debt balance. [1]
Key Facts
A borrower can settle a defaulted SBA loan for an amount equivalent to what the lender would obtain through forced collection tactics. [1]
Key Facts
Active cooperation, including arranging asset appraisals and providing financial reports, is a critical factor in securing an Offer-in-Compromise acceptance. [1]
Key Facts
Future earning potential is factored into OIC negotiations by evaluating present earnings, employment history, age, and health to determine potential wage garnishment value. [1]
Process
Lenders calculate settlement offers by adding the value of major assets like home equity, cash, and vehicles, then subtracting any secured liabilities. [1]

Synonyms & Alternate Names

  • OIC
  • SBA loan settlement
  • Offer in Compromise

Related Entities

  • Required Form:
  • Required Form:
  • Professional Representation:

Provenance

Sources

  1. https://secondwindconsultants.com/resource/sba-loan-default-a-2019-guide (SBA Offer-in-Compromise (OIC))

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