{"ok":true,"canonical_url":"https://dealroom.so/glossary/liquidation-expenses","api_url":"https://dealroom.so/api/public/glossary/liquidation-expenses","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":"liquidation-expenses","term":"Liquidation expenses","group":"Doing the deal","definition":"Costs incurred by the lender when recovering assets from a defaulting borrower to satisfy a loan. These can include legal fees, appraisal costs, and selling expenses.","what_it_means":"If your business defaults on an SBA loan, the lender will incur various costs to seize and sell collateral. These liquidation expenses are typically deducted from the proceeds of asset sales before applying funds to the outstanding loan balance, potentially increasing the amount still owed by guarantors.","url":"https://dealroom.so/glossary/liquidation-expenses","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"},{"slug":"13-cfr-part-120","title":"13 CFR Part 120 — Business Loans","official_url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120","official_label":"View on eCFR","authority_tier":1,"publisher":"Office of the Federal Register","source_guide_url":"https://dealroom.so/sba-7a/sources/13-cfr-part-120"}],"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":"collateral","term":"Collateral","url":"https://dealroom.so/glossary/collateral"}],"related_questions":[{"question":"What is the process for a lender to obtain SBA approval for extraordinary liquidation expenses?","url":"https://dealroom.so/for-lenders/questions/what-is-the-process-for-a-lender-to-obtain-sba-approval-for-extraordinary-liquidation-expe"},{"question":"What specific documentation is required in the Universal Purchase Package (UPP) to support eligible liquidation expenses?","url":"https://dealroom.so/for-lenders/questions/what-specific-documentation-is-required-in-the-universal-purchase-package-upp-to-support-e"},{"question":"How does a lender properly account for eligible liquidation expenses within the Universal Purchase Package (UPP)?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-properly-account-for-eligible-liquidation-expenses-within-the-universal-"},{"question":"How should a lender document eligible liquidation expenses within the UPP for a 7(a) guaranty purchase?","url":"https://dealroom.so/for-lenders/questions/how-should-a-lender-document-eligible-liquidation-expenses-within-the-upp-for-a-7-a-guaran"},{"question":"What specific documentation must a lender include in the Universal Purchase Package (UPP) to justify liquidation expenses?","url":"https://dealroom.so/for-lenders/questions/what-specific-documentation-must-a-lender-include-in-the-universal-purchase-package-upp-to"},{"question":"What documentation is required from a lender to justify liquidation expenses in a Universal Purchase Package (UPP)?","url":"https://dealroom.so/for-lenders/questions/what-documentation-is-required-from-a-lender-to-justify-liquidation-expenses-in-a-universa"}]},"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 — Liquidation expenses","url":"https://dealroom.so/glossary/liquidation-expenses","source_type":"DealRoom Data"}}