The 60/30/10 framework for SBA Offer-in-Compromise approvals

An SBA Offer in Compromise has only one real metric of success: did the lender (and ultimately the SBA Loan Servicing Center) accept your offer? The chemistry of that approval is consistent — and most owners get it wrong because they put 90% of their effort on the offer letter when 90% of the decision is made in the supporting documents.

The 60% — financial reality

Sixty percent of an SBA OIC turns on whether the documented financial reality leaves any other path. The lender wants to see (a) why the obligor cannot pay, (b) why the offered amount is the most that can be recovered, and (c) why waiting longer would not produce a better outcome.

Build the supporting package first. Personal financial statements (current month, audited if possible). Two years of business returns. A liquidation analysis that puts a dollar number on every SBA-secured asset at fire-sale value. A 12-month forward cash flow with assumptions footnoted.

The 30% — risk to recovery

Thirty percent of the decision is the lender's read on collection risk. Are there guarantors with collectible personal assets? Is the business already wound down? Is litigation likely if the OIC is rejected? The OIC narrative needs to make the alternative — chasing the obligor through years of post-judgment process — look unattractive.

We document specific obstacles: judgments already on record, prior bankruptcy filings, tax liens, age and health of guarantors. The point isn't to bluff — it's to make the lender's recovery analysis match yours.

The 10% — narrative and presentation

Only ten percent of the OIC decision is the cover letter. But that's the part most professionals over-invest in. A clean two-page summary stating the offer, the path to funding it, and the documented inability to pay more is enough. Long emotional letters actively hurt; the SBA's loan officer is reading dozens of these.

Approval rates we see

When the 60/30 are documented properly, our SBA OICs land in the 25–45% recovery range. That's the difference between an approved compromise and a referral to Treasury. It is almost entirely a function of the prep package, not the offer language.