Sixty days goes by fast. And suddenly you have an SBA loan, or even several SBA loans, that are 60 days past due.
What now?
Everything begins to move quickly. Especially if this includes loans sold on the secondary market.
Here’s what we recommend.
1. Be aware of your commitments to the secondary market.
SBA Form 1086, Secondary Participation Guarantee Agreement covers very clearly what your responsibilities are in the case of default.
2. Use a liquidation plan.
SBA only requires them for CLP loans, but they’re a great roadmap for your team to follow for any loan. Having a consistent process that applies to all past-due loans means no confusion, no missed steps.
3. Make sure your Approved Vendors list includes attorneys that know and understand SBA requirements.
This ensures that litigation, if and when necessary, stays within SBA’s framework.
Request a litigation plan if you believe litigation will exceed $10,000 or be non-
routine. And don’t forget to get SBA approval of the plan!
4. Review your file for deficiencies.
You’ll need to address these during your site visit, workout negotiations, or in your
guaranty purchase package.
5. Perform your site visit before the 60-day past due mark.
SBA is a stickler on this in repurchase of the guaranty.
Most importantly, know when to ask for help!
Having several past-due loans all at once can be overwhelming.
We’re here to help. Contact us today to learn more.