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Attorney2020, Attorney
Category: Business Law
Satisfied Customers: 2578
Experience:  I am a practicing attorney. I have experience in business law, bankruptcy, real estate law and estates.
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We applied and got SBA loan. Company folded due to lack of

Customer Question

We applied and got SBA loan for business. Company folded due to lack of business in oil industry. Bank informed us as borrowers that they were not going to apply to SBA for their guarantee because loan officer violated SBA standby rule and allowed payments to past owner. SBA says no payments to past owner on a carry back for two years so, loan officer called payments to previous owner extra payments of rent. We are talking to bank about an offer in compromise but wouldn't then allowing fraudulent payments violate our rights also because we had to make payment to past owner in violation of SBA.
Submitted: 1 year ago.
Category: Business Law
Customer: replied 1 year ago.
We got an SBA loan and the past owner carried some also. The past owner wanted to begin getting paid back immediately. At first the loan officer said no, because it violates the SBA standby agreement. We found the business using a business broker. The bus broker called the lender and they decided that we could pay the previous owner extra rent and a yearly consulting agreement and then at month 25 it could be taken off our loan to the previous owner. Loan officer said that would work with SBA. We questioned it because it would creat some cash flow issues. We went ahead with the loan. Business went under and during our OIC discussions the workout bank officer admitted that the bank was complicit with the business broker in a fraud. So, they could not apply to SBA to recoup their 75% that is guaranteed to the lender under SBA. Now they are negotiating with us far more aggressively because they are not insured by the SBA. If they don't think it would pass SBA rules then we should not have had to pay the past owner extra money because it is fraudulent. Any thoughts
Expert:  Attorney2020 replied 1 year ago.

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