{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/can-a-lender-include-unapproved-legal-fees-in-a-universal-purchase-package-upp","api_url":"https://dealroom.so/api/public/questions/can-a-lender-include-unapproved-legal-fees-in-a-universal-purchase-package-upp","question":"Can a lender include unapproved legal fees in a Universal Purchase Package (UPP)?","topic":"Guaranty purchase / UPP","audience":"lender","bot_mode":"lender","short_answer":"No, a lender cannot include unapproved legal fees in a Universal Purchase Package (UPP); extraordinary legal fees require prior SBA approval to be reimbursed.","rule":"Legal fees incurred during liquidation are generally considered liquidation expenses. While routine, reasonable legal expenses typically fall within a lender's delegated authority, extraordinary legal fees (e.g., those exceeding a certain percentage of the loan balance or a fixed dollar amount) require prior written SBA approval. If approval was not obtained for extraordinary fees, the SBA will likely disallow those costs from reimbursement in the UPP.","example":"During liquidation of a 7(a) loan, the lender incurs $80,000 in legal fees due to complex litigation. If the lender's delegated authority for legal fees is $25,000 and they failed to obtain prior SBA approval for the additional $55,000, the SBA would likely only reimburse the $25,000, reducing the lender's recovery in the UPP.","what_lenders_check":"Lenders must strictly adhere to SBA guidelines regarding liquidation expense approval. Including unapproved extraordinary legal fees can reduce the amount reimbursed by the SBA, directly impacting the lender's financial recovery from a defaulted loan.","required_facts":["Unapproved legal fees","Universal Purchase Package","Liquidation expenses","Prior SBA approval","Reimbursement"],"source_families":["SOP 50 57 - 7(a) Loan Servicing and Liquidation","Universal Purchase Package (UPP)","Request to Honor SBA 7(a) Loan Guaranty"],"official_sources":[{"title":"SOP 50 57 - 7(a) Loan Servicing and Liquidation","url":"https://www.sba.gov/sites/default/files/2025-09/FINAL%20SOP%205057%204%20version.pdf"},{"title":"Universal Purchase Package (UPP)","url":"https://www.sba.gov/sites/default/files/2026-05/UPPv5.2.pdf"},{"title":"Request to Honor SBA 7(a) Loan Guaranty","url":"https://www.sba.gov/sites/default/files/2026-01/Request%20to%20Honor%20SBA%207a%20Loan%20Guaranty.pdf"}],"related_questions":[{"question":"What are the most frequent reasons the SBA denies a 7(a) guaranty purchase request due to lender errors during origination?","url":"https://dealroom.so/for-lenders/questions/what-are-the-most-frequent-reasons-the-sba-denies-a-7-a-guaranty-purchase-request-due-to-l"},{"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":"What specific documentation is required in the Universal Purchase Package (UPP) to support a request for guaranty purchase when the borrower has defaulted due to fraud?","url":"https://dealroom.so/for-lenders/questions/what-specific-documentation-is-required-in-the-universal-purchase-package-upp-to-support-a"},{"question":"How does a lender process a Universal Purchase Package (UPP) when collateral is still being liquidated?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-process-a-universal-purchase-package-upp-when-collateral-is-still-being-"},{"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":"What is the primary purpose of the Universal Purchase Package (UPP) for lenders?","url":"https://dealroom.so/for-lenders/questions/what-is-the-primary-purpose-of-the-universal-purchase-package-upp-for-lenders"}],"related_terms":[{"term":"Universal Purchase Package","url":"https://dealroom.so/glossary/universal-purchase-package"},{"term":"Legal fees","url":"https://dealroom.so/glossary/legal-fees"},{"term":"Lender fees","url":"https://dealroom.so/glossary/lender-fees"},{"term":"Guaranty Purchase","url":"https://dealroom.so/glossary/guaranty-purchase"},{"term":"Lender administrative fees","url":"https://dealroom.so/glossary/lender-administrative-fees"},{"term":"Lender Packaging Fees","url":"https://dealroom.so/glossary/lender-packaging-fees"}],"related_tools":[{"name":"SBA 7(a) payment & fee calculator","url":"https://dealroom.so/sba-7a/calculator"},{"name":"Find an active SBA 7(a) lender","url":"https://dealroom.so/lenders"}],"data_freshness":{"last_reviewed":"2026-06-13","sba_rule_sources_checked_through":"2026-06-13"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/for-lenders/questions/can-a-lender-include-unapproved-legal-fees-in-a-universal-purchase-package-upp","source_type":"DealRoom Q&A"},"caveats":["Grounded in the current SBA rulebook; verify against official sources before relying on it for a live deal.","Not legal, tax, or financial advice and not an approval decision."]}