For SBA lenders
Short answer
The 7(a) lender retains all primary servicing responsibilities, including collecting payments, monitoring compliance, and initiating any necessary enforcement or liquidation actions, even after selling the guaranteed portion.
When a lender sells the guaranteed portion of a 7(a) loan on the secondary market, they do not transfer their servicing obligations. The originating lender remains the 'Holder' of the loan (from the borrower's perspective) and is fully responsible for all aspects of servicing, including borrower communication, collateral management, and any default or liquidation actions, in accordance with SBA requirements.
A lender sells the guaranteed portion of a $1,000,000 7(a) loan. Years later, the borrower defaults. The originating lender is still responsible for managing the default, pursuing collateral, and submitting the Universal Purchase Package to the SBA, not the secondary market investor.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 57 - 7(a) Loan Servicing and Liquidation
SOP 50 56 - Lender Participation Requirements
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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