{"ok":true,"canonical_url":"https://dealroom.so/glossary/loan-liquidation","api_url":"https://dealroom.so/api/public/glossary/loan-liquidation","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":"loan-liquidation","term":"Loan liquidation","group":"Doing the deal","definition":"This is the process a lender undertakes to recover funds when a borrower defaults on a loan, typically by selling the collateral.","what_it_means":"If you default on your SBA loan, the lender will initiate loan liquidation to recover their money. This involves selling the business's assets pledged as collateral, and potentially pursuing your personal guarantee. Understanding the collateral analysis during underwriting helps you see what's at stake and the lender's recovery options.","url":"https://dealroom.so/glossary/loan-liquidation","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":"loan-default","term":"Loan default","url":"https://dealroom.so/glossary/loan-default"},{"slug":"collateral","term":"Collateral","url":"https://dealroom.so/glossary/collateral"},{"slug":"personal-guarantee","term":"Personal guarantee","url":"https://dealroom.so/glossary/personal-guarantee"},{"slug":"collateral-analysis","term":"Collateral analysis","url":"https://dealroom.so/glossary/collateral-analysis"}],"related_questions":[{"question":"What constitutes 'prudent liquidation' for a 7(a) loan to protect the SBA guaranty during default?","url":"https://dealroom.so/for-lenders/questions/what-constitutes-prudent-liquidation-for-a-7-a-loan-to-protect-the-sba-guaranty-during-def"},{"question":"What are a lender's primary responsibilities once a 7(a) loan enters liquidation after default?","url":"https://dealroom.so/for-lenders/questions/what-are-a-lender-s-primary-responsibilities-once-a-7-a-loan-enters-liquidation-after-defa"},{"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":"How does a lender assess 'prudent liquidation' for a 7(a) loan to protect the SBA guaranty?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-assess-prudent-liquidation-for-a-7-a-loan-to-protect-the-sba-guaranty"},{"question":"What are a lender's primary responsibilities immediately after a 7(a) loan enters liquidation after default?","url":"https://dealroom.so/for-lenders/questions/what-are-a-lender-s-primary-responsibilities-immediately-after-a-7-a-loan-enters-liquidati"},{"question":"What specific steps must a lender take to commence liquidation actions after a 7(a) loan default?","url":"https://dealroom.so/for-lenders/questions/what-specific-steps-must-a-lender-take-to-commence-liquidation-actions-after-a-7-a-loan-de"}]},"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 — Loan liquidation","url":"https://dealroom.so/glossary/loan-liquidation","source_type":"DealRoom Data"}}