Restructure
60%
lower daily payment
SBA Loan Workouts
Resolve SBA loan default before it costs you everything
Hardship modifications, lender liquidation strategy, personal guarantee defense, and Treasury-stage workouts for SBA 7(a), 504, and EIDL loans. Led by attorneys who know SBA SOPs inside and out.
7(a)
term & working capital
504
real estate & equipment
EIDL
disaster + COVID portfolio
TOP
Treasury offset stage
THE PROBLEM
SBA debt is different
SBA WORKOUT · LENDER STAGE
$510K · 7(a)
Hardship modification · NJ borrower
At each stage the leverage shifts.
SBA loans look like bank debt — but they're federal-guaranty obligations with a different rulebook. Default triggers a sequence: lender workout, lender liquidation, charge-off, transfer to SBA, eventual transfer to Treasury.
At each stage the leverage shifts. Pre-charge-off, the lender has the pen. Post-transfer to SBA, it's SOP 50 57 territory. Once Treasury takes over, AWG and tax refund offsets enter the picture.
We map your loan to its current stage, identify the highest-leverage move, and execute. The earlier you call, the more options you have.
WHAT WE HANDLE
6 scenarios, opened up
01
Loan term extension, payment reduction, or interest deferral negotiated directly with the lender pre-default.
How we run it
- 01Document hardship + future cash flow
- 02Build modification package per SOP
- 03Submit to lender workout group
- 04Execute amended note
Typical outcome
Avg outcome: payment cut 30–50%, term extended
02
Negotiate during the lender's liquidation phase to maximize charge-off discount and structured close-out.
How we run it
- 01Identify lender liquidation timeline
- 02Position for charge-off vs. settlement
- 03Negotiate close-out terms
- 04Document release
Typical outcome
Avg outcome: 20–50% of balance settled at lender stage
03
Challenge or limit personal guarantor exposure, especially when the business has dissolved.
How we run it
- 01Audit PG scope + personal asset exposure
- 02Build hardship and disclosure
- 03Negotiate cap, release, or carve-out
- 04Document PG resolution
Typical outcome
Avg outcome: PG capped, released, or substantially reduced
04
TOP, AWG defense, and direct Treasury negotiations once the loan has been transferred.
How we run it
- 01Confirm Treasury referral + TOP status
- 02Build hardship per Treasury rules
- 03Negotiate settlement or AWG defense
- 04Close out TOP file
Typical outcome
Avg outcome: 10–30% Treasury settlement; AWG halted
05
CDC + first-mortgage coordination on 504 loan defaults — different mechanics than 7(a).
How we run it
- 01Coordinate CDC + first-mortgage lender
- 02Sequence workout across both
- 03Execute coordinated terms
- 04Close out 504 file
Typical outcome
Avg outcome: 504 resolved without dual foreclosure
06
COVID-era EIDL portfolio strategy — including the 2024–25 wave of defaults now hitting collections.
How we run it
- 01Confirm EIDL terms + collateral position
- 02Build modification or settlement ask
- 03Submit per current SBA EIDL guidance
- 04Close out per accepted terms
Typical outcome
Avg outcome: EIDL modified or settled per SBA framework
“
FROM THE DESK
An SBA loan in default isn't one case — it's four cases on a clock. Lender stage, liquidation, SBA stage, Treasury. Every transition costs you leverage and adds enforcement tools you didn't have to face before.
Our process
From
same-day
intake
to
closeout
Most cases hit resolution between months 3 and 6. We move on day one because deadlines don't wait.
01
Pull the SBA loan agreement, payment history, current servicing notice, and SOP 50 57 versioning so we know what governs YOUR loan and what relief levers actually apply.
Note · SOP version · Payment ledger · Servicing notice
02
Open formal communication with SBA loan servicing center or special servicer. Document hardship. Pause aggressive collection and protect operating accounts during workout window.
Hardship letter · Loan servicing engagement · Account protection
03
Negotiate with both the lender (workout, modification, deferment) AND the SBA Loan Guaranty Center on offer-in-compromise terms when liquidation is on the table.
Workout proposal · OIC package · Liquidation analysis
04
Signed modification, OIC acceptance letter, or partial release. Defend any deficiency claim and document personal-guarantee carve-outs.
Modification · OIC acceptance · PG release · Deficiency defense
“Delancey Street walked us through every step. The settlement saved the business — and our credit.”
WHERE WE WORK
SBA Workouts cases in all 50 states
FAQ
Common questions
What's my best move pre-default?
A documented hardship modification with the lender, before the loan is referred to liquidation. Most 7(a) lenders have workout authority within defined parameters and prefer to use it. The conversation has to be approached with proper documentation and a credible plan.
Can the SBA come after my house?
Yes — most SBA 7(a) loans require a personal guarantee, and the SBA can pursue personal assets including real estate. Defending personal guarantees and protecting equity is a core part of our SBA workout strategy.
How long does an SBA workout take?
Lender-stage workouts: weeks to a few months. Liquidation/charge-off: 3–9 months. Treasury stage: 6–18 months depending on case complexity. We give you a realistic timeline at the strategy stage.
What if my loan was sold to Treasury?
Once a loan moves to Treasury (TOP — Treasury Offset Program), the strategy changes. We handle TOP-stage workouts including AWG (administrative wage garnishment) defense and Treasury settlement negotiations.
Will an SBA settlement affect my credit?
Default and settlement events do appear on personal credit reports for guarantor loans. We work to structure settlements that minimize ongoing reporting damage and accelerate the path to recovery.
Do you handle SBA 504 loans too?
Yes — both 7(a) and 504 loans, plus EIDL loans (including the COVID-era EIDL portfolio that's now hitting default).
RESOURCES
Read more on sba workouts
Guide
Negotiation flow
1 Demand
2 Counter
3 Term sheet
4 Settled
How does business debt settlement work?
Step-by-step explanation of the negotiation, timeline, and what changes for your business.
Read article
Defense
VS
Fight
$0
if you win
When to settle vs. when to fight
Not every creditor responds to negotiation. Here's how to read the situation.
Read article
Strategy
Avg. payment reduction
54%
Best business debt settlement companies (2026)
How we compare on track record, pricing, and outcomes.
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GET IN TOUCH
Talk to a strategist about your sba workouts case
Free initial review. We'll look at your contracts, the creditor mix, and what's actually triggerable in the next 30 days. No commitment, no sales pitch — just a real read on your situation.
Direct line
212-210-1851
Picked up by an actual case manager — no phone tree.
Email
info@delanceystreet.com
Replies within 4 business hours, 24/7 for COJ emergencies.
Confidential intake
Encrypted document upload
For uploading contracts, UCC notices, and bank statements.
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