For SBA lenders
Short answer
Lenders are generally required to submit a liquidation plan to the SBA within 90 days after loan default, or within a timeframe specified by SBA in a specific communication.
Upon a loan default, the lender must promptly initiate liquidation actions to minimize losses. Submitting a liquidation plan within the specified timeframe demonstrates proactive management and outlines the lender's strategy for maximizing recovery on the defaulted loan.
A 7(a) loan defaults on January 1. The lender must develop and submit a comprehensive liquidation plan, including asset recovery strategies and cost estimates, to the SBA by March 31.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 57 - 7(a) Loan Servicing and Liquidation
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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