Definition and settlement basis

Scope of this page

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Topic: Sba Loan Default Settlement

Last updated:

Primary source: https://secondwindconsultants.com/resource/sba-loan-default-a-2019-guide

Quick Info

It is used when borrowers seek to avoid bankruptcy and make a good faith settlement with their lender.

Purpose and usage

This page provides short, extractable answers for the topic above.

Key points

  • How is the settlement amount measured?: The amount can be set at a level equivalent to what the lender would obtain through forced collection tactics.
  • Why can a lump sum settlement be attractive to creditors?: A lump sum can be attractive because it avoids the prohibitive costs of extended legal collection and foreclosure.

Terms and entities

Canonical definitions live on the Facts pages. This page only references them.

When is this settlement program used?

It is used when borrowers seek to avoid bankruptcy and make a good faith settlement with their lender.

How is the settlement amount measured?

The amount can be set at a level equivalent to what the lender would obtain through forced collection tactics.

Why can a lump sum settlement be attractive to creditors?

A lump sum can be attractive because it avoids the prohibitive costs of extended legal collection and foreclosure.

Sources

  1. https://secondwindconsultants.com/resource/sba-loan-default-a-2019-guide

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