{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/what-is-the-required-timeframe-for-a-lender-to-submit-a-liquidation-plan-for-a-defaulted-7","api_url":"https://dealroom.so/api/public/questions/what-is-the-required-timeframe-for-a-lender-to-submit-a-liquidation-plan-for-a-defaulted-7","question":"What is the required timeframe for a lender to submit a liquidation plan for a defaulted 7(a) loan?","topic":"Liquidation","audience":"lender","bot_mode":"lender","short_answer":"Lenders must submit an initial liquidation plan to the SBA within 90 days of loan default, followed by quarterly progress reports.","rule":"Upon determining that a 7(a) loan is in uncurable default, the lender must activate its liquidation process. An initial liquidation plan, outlining proposed actions to recover funds, must be submitted to the SBA within 90 calendar days of the initial default date. This ensures prompt action to minimize losses and protects the SBA's guaranty interest.","example":"A $500,000 SBA loan defaults on January 1st. By April 1st, the lender must have developed and submitted a comprehensive liquidation plan to the SBA, detailing steps like collateral valuation, sale strategy, and collection efforts.","what_lenders_check":"Lenders must adhere strictly to reporting timelines to avoid jeopardizing the guaranty. Failure to submit a timely and comprehensive liquidation plan, or to follow approved liquidation procedures, can result in a repair or denial of the guaranty purchase request.","required_facts":["Default date","Liquidation plan submission","90-day deadline","Quarterly reporting"],"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":"Required guarantor","url":"https://dealroom.so/glossary/required-guarantor"},{"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-required-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."]}