Fill and Sign the Names as Shown on the Tax Return Form

Offer In Compromise (OIC) Tabs Version Dated 10/2011 In order for SBA to process your request for an Offer In Compromise, the following tabs must be completed. Please be sure to complete all information requested and provided the supporting documentation as noted. If any information is not provided, please provide a detailed explanation. Once your package is received it will be assigned to a loan specialist for review and consideration. If the loan specialist reviewing your case needs any additional information they will contact you directly. If you would like a status update please email the Center at loanresolution@sba.gov When it appears likely that the borrower does not have the ability to pay in full the deficiency balance after liquidation of all worthwhile collateral, it may be appropriate to settle for less than the full amount due. The amount being offered must bear a reasonable relationship to the estimated net present value of the projected amount of recovery available through enforced collection. Therefore, when the liability of the borrower is clear and the SBA can collect fully without protracted litigation or large unrecoverable expenses, there is little basis to settle for less than what is owed. To process an Offer in Compromise, we must receive the following: TAB 1 OIC Information Sheet TAB 2 Obligors/Collateral Worksheet TAB 3 Recovery Worksheet TAB 4 Summary TAB 5 Financial Analysis TAB 6 SBA Required Documentation TAB 7 Asset Valuations TAB 8 Litigative Risks Express and 504 Loan Packages should be forwarded to: Fresno: fsc.504liquidations@sba.gov or fsc.servicing@sba.gov Little Rock: lrsc.504liquidations@sba.gov or lrsc.servicing@sba.gov 7a Commercial Loans Packages should be forwarded to: loanresolution@sba.gov Submit Electronically: Send This File (Select Loan Resolution @sba.gov as recipient) Fax: (202) 481-4674 Mail: U.S. Small Business Administration Attn: OIC Department 1145 Herndon Parkway Herndon, VA 20170 Information Sheet Lender Name Borrower Name Lender Contact Information: SBA Loan Number Contact Name Companion Loan Phone Number Date Email 1. OFFEROR: Ongoing Business Concern? Yes No Who is making offer? Indicate whether the offeror is the borrower, assumptor, limited or full guarantor, and explain the offeror’s relationship to borrower and other guarantors or obligors. Releases/Compromises without a monetary payment will generally not be accepted. Offeror Offeror Type 2. TYPE AND AMOUNT OF COMPROMISE: a. Cash $ Term $ payable at $ for a term of months/years b. monthly at a rate of (Maximum 5 years) SOURCE OF FUNDS : List pertinent details on any assets being sold to raise the funds, and if the funds are being obtained through a loan, state what collateral is being offered for the loan: 1 Obligors/Collateral Worksheet Collateral Worksheet Collateral Lien Position Current Lien Per Loan Remaining Liquidated Substituted Abandoned Position Authorization 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Guarantor Worksheet Guarantor Per Loan Authorization 1 2 3 4 5 6 7 8 9 10 11 12 13 14 2 Remaining Released Offeror Bankrupt Recovery Worksheet Please summarize all recoveries received from sale of collateral that secured obligation using the spreadsheet below. You must include all supporting documentation (i.e. HUD 1 sheet(s), auctioneer's report, settlement statement(s), and purchase agreements). Date Collateral Amount Applied to Indebtedness 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Total Recovery 3 Summary 1. Summarize major features of loan and reasons for problems. 2. Indicate extent of involvement of offeror in borrower’s business. 3. Give offeror’s current employment, present earnings, number of dependents, general health. 4. Explain any possible fraud or misrepresentation, including any apparent effort to place assets beyond the reach of lender/SBA and details/status of pending or previous OIG referral, if any. 5. Was offeror cooperative in achieving best possible recovery from business assets? 4 Financial Analysis 1. COMPREHENSIVE FINANCIAL ANALYSIS : Provide your comprehensive evaluation of the offeror’s financial situation for SBA to determine the appropriateness of the offer including a summary of your efforts to verify the ability to pay and available assets using credit reports, asset search reports, and last two years’ tax returns. Your analysis should also address the current valuation/appraisal basis of any significant assets together with an explanation for the disposition of any significant assets which no longer appear on offeror’s current financial statement. Assets now owned should be evaluated to determine the forced sale value of each major item together with the amount of prior liens, outstanding taxes, estimated costs of enforced collection, with net estimated recovery from all assets indicated. * SBA must have full disclosure. The absence of full disclosure indicates lack of good faith on the part of the offeror, and therefore no basis for a compromise. 2. COMMENTS OF LENDER: This section should fully justify your recommendation. Provide an objective analysis of the situation and an explanation of all pertinent factors. Comment on the extent of negotiations to reach the compromise offer. 3. RECOMMENDATION OF LENDER: If approval is recommended state what other action will be needed to resolve remaining debt (e.g. other guarantors to pursue, assets which have not yet been accounted for, charge off). 5 Required SBA Documentation 6 Please attach the following forms to this tab. Offers submitted in some other format are only acceptable if the document makes reference to 18 U.S. Code 1001 (false statements) in a fashion similar to that of the SBA Form 1150. A. A copy of the SBA Loan Authorization. A current completed and signed SBA Form 1150 A current completed and signed SBA Form 770 or equivalent must be used A copy of the original personal financial statements from origination, SBA Form 413 B. Going Concerns Obligors must submit current interim and last year-end financial statements. Affiliates SBA requires submission of current business financial statements to verify income. C. Income Tax Returns If the obligor has affiliates, please attach a copy of the last two years of tax returns from the obligor(s) wishing to be released as well as the business tax returns on all entities owned by the obligor(s) to this tab. If tax returns are unavailable, please provide a copy of a filed extension or other explanation. D. Credit Reports Please attach a copy of a recent credit report for the guarantor(s) wishing to be released. Asset Valuations A Post-Default Appraisal is necessary to determine the Liquidation Value of real or personal property collateral. Please provide a copy of a current independent third party valuation of any collateral that would be released as part of the proposed settlement offer. In addition, provide the Agency with current valuations of any property or assets the guarantor may own that may be attached or pursued. Collateral Type 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Fair Market/Value Amount Date of Valuation Equity 7 Required Litigative Risks 8 Please attach a detailed analysis of any factors that would prohibit the Agency or Lender from seeking any further recovery beyond the settlement amount proposed. The Agency is aware there are a number of factors that may prohibit our ability to collect fully from the guarantors, and we ask that those factors be addressed to fully support your recommendation. Examples : Litigation Expenses Statue of Limitations Bankruptcy Exemptions Homestead Exemptions Jointly Held Property Tenants by the Entirety Anti-Deficiency States Redemption Rights One Action Statues