SBA Loan and Charge Off on Credit Report (Borrower Owes Ex-Spouse Debt)


1. Borrower wants to refinance his business debt.
2. Borrower went through a divorce to a trial.
3. Borrower and Ex-Spouse were ordered to split the credit card  debt and were responsible for paying off their portion of the debt.
4. Borrower’s Ex-Spouse did not pay off the court ordered debt.
5. This debt is found on the Borrower’s Credit Report as a charge off.


1. Borrower cannot obtain an SBA Loan until this credit issue is dealt with.
2. Bills to be paid off total $25,000.

Where: Milwaukee, WI
When: As soon as this issue is resolved, the loan can close


1. Borrower went through all his options including friends, relatives, reviewing personal and business assets.
2. Borrower could not find the means to pay off the subject debt.

Decision: Not Eligible for SBA Loan


1. Recent charge off which could go to judgment.
2. Credit Score was not the issue.

Eligibility Cure:

1. The Lender of choice was apprised of the situation and cured the issue by including the $25,000 as working capital.
2. The Borrower was allowed to use the working capital to pay off the charged off debt at the closing.

To talk about your SBA Loan financing call:

Joel Soforenko
Continental Finance Capital Corporation
617-336-3215 x 5