{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/what-specific-documentation-must-a-lender-include-in-a-liquidation-plan-submitted-to-the-s","api_url":"https://dealroom.so/api/public/questions/what-specific-documentation-must-a-lender-include-in-a-liquidation-plan-submitted-to-the-s","question":"What specific documentation must a lender include in a liquidation plan submitted to the SBA?","topic":"Liquidation","audience":"lender","bot_mode":"lender","short_answer":"A liquidation plan must include an analysis of the borrower's financial condition, proposed actions for collateral recovery, guarantor collection strategy, estimated recovery amounts, and a timeline for actions.","rule":"When a 7(a) loan defaults and the lender plans for liquidation, a comprehensive liquidation plan must be submitted to the SBA for approval, particularly for larger loans or complex situations. This plan details the loan status, borrower's financial information, a detailed strategy for foreclosing on or selling collateral, pursuing personal and corporate guarantors, estimated recovery proceeds, projected liquidation expenses, and a clear timeline for all proposed actions.","example":"A lender submits a liquidation plan for a defaulted $1 million loan. The plan includes the borrower's most recent financials, an appraisal of the real estate, a plan to sell the equipment via auction, a legal strategy to pursue two personal guarantors, an estimate of $300,000 net recovery, and a 12-month timeline.","what_lenders_check":"Lenders prioritize creating robust and realistic liquidation plans. They focus on accurate financial analysis, clear action steps, and reasonable recovery estimates to gain SBA approval and maximize the chances of a successful guaranty purchase.","required_facts":["Borrower financial analysis","Collateral recovery strategy","Guarantor collection plan","Estimated recovery","Action timeline"],"source_families":["SOP 50 57 - 7(a) Loan Servicing and Liquidation","Universal Purchase Package (UPP)","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":"Universal Purchase Package (UPP)","url":"https://www.sba.gov/sites/default/files/2026-05/UPPv5.2.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 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"},{"question":"What is the specific lender's responsibility regarding environmental due diligence during the liquidation of real estate collateral?","url":"https://dealroom.so/for-lenders/questions/what-is-the-specific-lender-s-responsibility-regarding-environmental-due-diligence-during-"}],"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":"SBA lender","url":"https://dealroom.so/glossary/sba-lender"},{"term":"Repair to the guaranty","url":"https://dealroom.so/glossary/repair-to-the-guaranty"},{"term":"Collateral documentation","url":"https://dealroom.so/glossary/collateral-documentation"},{"term":"Eligibility documentation","url":"https://dealroom.so/glossary/eligibility-documentation"}],"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-specific-documentation-must-a-lender-include-in-a-liquidation-plan-submitted-to-the-s","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."]}