Liquidating sba loans
Liquidation can also refer to the process of selling off inventory, usually at steep discounts.It is not necessary to file for bankruptcy to liquidate inventory.Liquidation can also refer to the act of exiting a securities position.In the simplest terms, this means selling the position for cash; another approach is to take an equal but opposite position in the same security, for example, by shorting the same number of shares that make up a long position in a stock.Finally, shareholders receive any remaining assets, in the unlikely event that there are any.In such cases, investors in preferred stock have priority over holders of common stock.Alison Rind is a commercial lending attorney at Lerch, Early & Brewer who represents commercial lenders in loan transactions and other commercial matters, including participants in SBA and other government guaranteed lending programs.October 15, 2013 SBA recently released a revised version of the SOP 50 10 5 (F), effective January 1, 2014 in which the "new" collateral requirements have dramatically changed.
Lerch Early will be holding a seminar on the updates; please email Anne Core at [email protected] you’d like to be included on the invitation list.Assets are distributed based on the priority of various parties’ claims, with a trustee appointed by the Department of Justice overseeing the process.The most senior claims belong to secured creditors, who have collateral on loans to the business.It is an event that usually occurs when a company is insolvent, meaning it cannot pay its obligations when they come due. Not all bankruptcies involve liquidation; Chapter 11, for example, involves rehabilitating the bankrupt company and restructuring its debts.As company operations end, the remaining assets are used to pay creditors and shareholders, based on the priority of their claims. The business is no longer in existence once the liquidation process is complete.