Q. How will I be notified of a bounced or Non-Sufficient Funds (NSF)?
If a payment fails due to an NSF, your financial institution will notify you. Additionally, the lender will be notified by their financial institution as well. Once the lender receives an NSF notification, our Loan Servicing department will apply the NSF and notify the client via email or call if warranted. This email will also include instructions on how to resolve the NSF. Please note that a $15.00 fee will be applied for each NSF instance.

 

Q. What happens if the monthly repayment processed via ACH auto payment bounces and is not resolved?
A. If two consecutive monthly repayment is processed via an ACH auto pay, and not resolved, the client’s ACH auto pay option will be deactivated. The Loan Servicing Department will send an email designated primary contact on file and notify the client via email or call if warranted. This email will also include instructions on how to resolve the NSF. Please note that a $15.00 fee will be applied for each NSF instance.

 

Q. Can my ACH be reinstated after deactivation due to returned payments?
A. Yes, ACH payments may be reinstated after three consecutive successful payments. You may request reinstatement at that time by contacting our Servicing Department at servicing@mainstreetlaunch.org.

 

Q. Does a certain delinquency status trigger specific action?
A: Yes. If your account is 30 or more days past due (typically two missed payments), a team member will contact you. At 60 or more days past due (typically three missed payments), we will send a demand letter via email and certified postal mail outlining the consequences of continued delinquency.

 

Q: What are the implications of my loan becoming 60+ days late or if I default on my microloan or SBA loan?
A: Delinquency (missing payments) or default (failing to repay the loan entirely) can have serious consequences. These may include:

  • Damage to your credit – Late or missed payments are reported to business credit bureaus and can lower your credit score, making it harder to access financing in the future.
  • Collection actions – We may begin collection efforts, which could include legal action or involving third-party collectors.Loss of collateral – If your loan is secured, we may seize pledged assets.
  • Impact on business operations – For SBA loans, default may affect your ability to qualify for future government-backed financing.
  • Personal liability – Since you personally guaranteed the loan, you are held responsible for repayment even if your business cannot pay.

 

Common Occurrences Resulting in Payment or Technical Default

  • Change in Ownership Without Lender Approval
  • Selling Business Assets Without Lender Approval
  • Selling Business Assets Outside SBA Policy Processes
  • Selling Business Without Lender Approval Outside SBA Policy Processes
  • Non-Compliance With Annual Financial/Document Requests
  • Uncured Payment Default
  • Non-Compliance With Site Visit Requirements
  • Failure to Use Loan Proceeds in Accordance with Loan Terms/Conditions
  • Failure to Provide Receipts for Use of Loan Funds
  • Failure to File or Pay Taxes
  • Failure to Maintain Proper Insurances
  • Conversion of Entity Without Lender Approval
  • Change in Ownership Without Lender Approval
  • Failure to Disclose Acquisition of New Business Assets

 

If you have questions or require assistance on any compliance related item, please send an email with your inquiry to: compliance@mainstreetlaunch.org