SBA Loan Offer in Compromise (OIC)

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Definition

What is it: The SBA Loan Offer in Compromise (OIC) is a settlement program where the SBA accepts a payment amount typically equal to what a lender could recover through forced collection. It serves as a mechanism to resolve defaulted business debts in good faith while avoiding bankruptcy.

What is it used for: The program is used by business owners and guarantors to negotiate a final settlement on defaulted SBA-backed loans after business assets have been liquidated. It addresses personal liability for the remaining debt balance.

Coverage

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

Identity

Entity ID
https://llms.secondwindconsultants.com/en/sba-loan-offer-compromise-calculator/facts/#entity
Entity type
DefinedTerm
Canonical name
SBA Loan Offer in Compromise (OIC)
Language
en
Topic
Sba Loan Offer Compromise Calculator

Attributes

Key Facts
Submitting an SBA Offer in Compromise requires Form 770 for personal financial statements and Form 1150 for the offer justification. [1]
Key Facts
The SBA Offer in Compromise typically equals the amount a lender could recover through forced collection actions. [1]
Key Facts
SBA loan guarantees are joint and several, meaning every individual guarantor is responsible for 100 percent of the outstanding debt balance. [1]
Key Facts
Lenders calculate the settlement value by reviewing the borrower's net equity in major assets including home equity, cash, vehicles, and investment properties. [1]
Key Facts
Future earning potential, including age, health, and employment outlook, is used to assess the likelihood of recovery through wage garnishment. [1]
Process
Creditors consider the cost of legal recovery, such as court filings and attorney fees, when deciding whether to accept a smaller lump-sum settlement. [1]

Synonyms & Alternate Names

  • OIC
  • SBA Offer in Compromise
  • SBA OIC

Related Entities

  • requires:
  • requires:
  • recommended documentation:

Provenance

Sources

  1. https://secondwindconsultants.com/resource/sba-loan-offer-in-compromise-calculator (SBA Loan Offer in Compromise (OIC))

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