For SBA lenders
Short answer
A critical documentation for a liquidation plan includes the complete loan file, demand letters, collateral appraisals, lien search results, a detailed summary of recovery actions, and justification for any proposed sales.
SOP 50 57 outlines the extensive documentation required for a liquidation plan. This includes all loan documents, evidence of default, correspondence with the borrower and guarantors, appraisals of all collateral, lien search results, and a comprehensive narrative describing all efforts to mitigate loss and collect on the loan.
A lender submits a liquidation plan to the SBA, including the original credit memo, all promissory notes, personal guaranties, UCC filings, environmental reports, and a log of all collection calls and demand letters sent to the borrower.
Insider move
Lenders must ensure their liquidation plans are well-documented and comprehensive. Incomplete documentation or lack of justification for actions taken can lead to delays in SBA review and potential guaranty repairs or denials.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 57 - 7(a) Loan Servicing and Liquidation
Universal Purchase Package (UPP)
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.
More on liquidation
Terms in this answer
Pre-qualify your SBA 7(a) deal
Tell us the business, the price, and where you are — we'll point you to the lenders most likely to fund a deal like yours and flag anything that trips up approval.
Free · No documents · Usually same-day