{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/what-is-the-maximum-timeframe-for-a-lender-to-submit-a-liquidation-plan-for-a-defaulted-7-","api_url":"https://dealroom.so/api/public/questions/what-is-the-maximum-timeframe-for-a-lender-to-submit-a-liquidation-plan-for-a-defaulted-7-","question":"What is the maximum timeframe for a lender to submit a liquidation plan for a defaulted 7(a) loan?","topic":"Liquidation","audience":"lender","bot_mode":"lender","short_answer":"For most defaulted 7(a) loans, the lender must submit a liquidation plan to the SBA within 90 calendar days of the loan's default (when it reaches 90 days past due).","rule":"SBA policy requires prompt and aggressive liquidation actions for defaulted loans to mitigate losses. The 90-day deadline ensures that lenders initiate the liquidation process without undue delay. The liquidation plan outlines the lender's strategy for collecting on the loan, including collateral recovery, legal actions, and estimated recovery amounts. Delays in submission without proper justification can result in a guaranty repair or denial.","example":"A $700,000 7(a) loan becomes 90 days past due on October 1st. The lender must submit a comprehensive liquidation plan to the SBA by December 30th, outlining efforts to contact the borrower, assess collateral, and propose a strategy for recovery.","what_lenders_check":"Lenders are concerned with adhering to the prescribed timelines for liquidation actions to preserve the SBA guaranty. Failure to submit a timely and comprehensive liquidation plan is a common basis for SBA repairs or denials during the guaranty purchase review.","required_facts":["Loan default date","90 days past due","Liquidation plan submission","Mitigate losses","SBA guaranty preservation"],"source_families":["SOP 50 57 - 7(a) Loan Servicing and Liquidation","13 CFR Part 120 - Business Loans"],"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":"13 CFR Part 120 - Business Loans","url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120"}],"related_questions":[{"question":"What constitutes diligent liquidation efforts a lender must demonstrate before submitting a guaranty purchase request?","url":"https://dealroom.so/for-lenders/questions/what-constitutes-diligent-liquidation-efforts-a-lender-must-demonstrate-before-submitting-"},{"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 are the SBA's expectations for a lender's collateral valuation during the liquidation process of a defaulted 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/what-are-the-sba-s-expectations-for-a-lender-s-collateral-valuation-during-the-liquidation"},{"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 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 specific lender process for obtaining SBA approval for a debt compromise offer from a borrower in liquidation?","url":"https://dealroom.so/for-lenders/questions/what-is-the-specific-lender-process-for-obtaining-sba-approval-for-a-debt-compromise-offer"}],"related_terms":[{"term":"Liquidation Plan","url":"https://dealroom.so/glossary/liquidation-plan"},{"term":"Initial Liquidation Plan","url":"https://dealroom.so/glossary/initial-liquidation-plan"},{"term":"Defaulted loan","url":"https://dealroom.so/glossary/defaulted-loan"},{"term":"Repair to the guaranty","url":"https://dealroom.so/glossary/repair-to-the-guaranty"},{"term":"Maximum SBA 7(a) Loan Amount","url":"https://dealroom.so/glossary/maximum-sba-7-a-loan-amount"},{"term":"Lender's Application for Guaranty","url":"https://dealroom.so/glossary/lender-s-application-for-guaranty"}],"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/what-is-the-maximum-timeframe-for-a-lender-to-submit-a-liquidation-plan-for-a-defaulted-7-","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."]}