For SBA lenders
Short answer
A lender must itemize all eligible liquidation expenses within the Universal Purchase Package (UPP), providing detailed invoices, receipts, and proof of payment for each expense. Documentation must clearly show the expenses are reasonable, customary, and directly related to the liquidation of the 7(a) loan.
The SBA will only purchase the guaranteed portion of a loan after the lender has conducted prudent liquidation and submitted a complete UPP. This package must include all eligible and documented liquidation expenses, such as legal fees, appraisal costs, environmental reports, and security services. Expenses must be justified as necessary to protect the government's interest.
For a defaulted 7(a) loan, a lender incurred $5,000 in legal fees for collateral recovery and $1,500 for an updated appraisal. In the UPP, the lender submits detailed invoices from the law firm and appraiser, along with copies of canceled checks or wire transfer confirmations, clearly linking these expenses to the liquidation process.
Universal Purchase Package (UPP)
SOP 50 57 - 7(a) Loan Servicing and Liquidation
Request to Honor SBA 7(a) Loan Guaranty
Last checked 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
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