For SBA lenders
Short answer
The UPP requires detailed invoices, proof of payment, and justification for all eligible liquidation expenses, such as legal fees, appraisal costs, and collateral disposition expenses.
For SBA to reimburse eligible liquidation expenses, the lender must provide clear, itemized documentation within the UPP. This includes invoices from third-party vendors, proof of actual payment (e.g., cancelled checks, bank statements), and a narrative explaining the necessity and reasonableness of each expense. Expenses must be directly related to the liquidation process and within SBA guidelines.
In the UPP, a lender includes an invoice from an auction company for $10,000 for equipment sale, a legal bill for $5,000 related to foreclosure, and a receipt for a $1,500 appraisal. Each document is accompanied by proof of payment and a brief explanation of the expense's relevance to the liquidation.
Insider move
SBA rigorously reviews liquidation expenses. Lenders must meticulously track and document all costs, ensuring they are reasonable, necessary, and eligible under SBA policy. Inadequate documentation or ineligible expenses can lead to disallowance and a reduction in the guaranty purchase amount.
Universal Purchase Package (UPP)
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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