{"ok":true,"canonical_url":"https://dealroom.so/glossary/initial-liquidation-plan","api_url":"https://dealroom.so/api/public/glossary/initial-liquidation-plan","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"initial-liquidation-plan","term":"Initial Liquidation Plan","group":"Doing the deal","definition":"A preliminary strategy developed by the lender to recover funds if a loan defaults, outlining how collateral would be seized and sold. While you aim for success, this plan is always in the background.","what_it_means":"When a loan defaults, the lender must submit an Initial Liquidation Plan to the SBA detailing their strategy to recover the outstanding balance. This plan identifies all Collateral, estimates its value, and outlines the steps for Debt Collection and sale. Understanding your personal guarantee and pledged assets means understanding this potential outcome.","url":"https://dealroom.so/glossary/initial-liquidation-plan","official_sources":[{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"}],"related":[{"slug":"liquidation","term":"Liquidation","url":"https://dealroom.so/glossary/liquidation"},{"slug":"loan-default","term":"Loan default","url":"https://dealroom.so/glossary/loan-default"},{"slug":"debt-collection","term":"Debt Collection","url":"https://dealroom.so/glossary/debt-collection"},{"slug":"collateral","term":"Collateral","url":"https://dealroom.so/glossary/collateral"}],"related_questions":[{"question":"What are the critical elements a lender must include in the initial liquidation plan submitted to the SBA?","url":"https://dealroom.so/for-lenders/questions/what-are-the-critical-elements-a-lender-must-include-in-the-initial-liquidation-plan-submi"},{"question":"What is the required timeframe for a lender to submit a liquidation plan?","url":"https://dealroom.so/for-lenders/questions/what-is-the-required-timeframe-for-a-lender-to-submit-a-liquidation-plan"},{"question":"What specific documentation must a lender include in a liquidation plan submitted to the SBA?","url":"https://dealroom.so/for-lenders/questions/what-specific-documentation-must-a-lender-include-in-a-liquidation-plan-submitted-to-the-s"},{"question":"What minimum collection efforts must a lender demonstrate before submitting a 7(a) liquidation plan?","url":"https://dealroom.so/for-lenders/questions/what-minimum-collection-efforts-must-a-lender-demonstrate-before-submitting-a-7-a-liquidat"},{"question":"What is the role of a \"workout plan\" in the liquidation of a defaulted 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/what-is-the-role-of-a-workout-plan-in-the-liquidation-of-a-defaulted-7-a-loan"},{"question":"What is the maximum timeframe for a lender to submit a liquidation plan for a defaulted 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/what-is-the-maximum-timeframe-for-a-lender-to-submit-a-liquidation-plan-for-a-defaulted-7-"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Initial Liquidation Plan","url":"https://dealroom.so/glossary/initial-liquidation-plan","source_type":"DealRoom Data"}}