For SBA lenders
Short answer
Before submitting a UPP, lenders must prudently liquidate all available collateral, pursue collection from guarantors, conduct a thorough analysis of loss mitigation strategies, and document all actions taken to maximize recovery.
Lenders are expected to liquidate defaulted loans in a commercially reasonable and prudent manner, as if the loan were not guaranteed. This includes conducting site visits, securing and valuing collateral, marketing and selling assets, and pursuing collection from all obligors and guarantors. All these steps must be meticulously documented.
For a defaulted loan, the lender would hire an appraiser to value equipment, engage a liquidator to sell assets, pursue judgments against personal guarantors, and document all legal and collection expenses. Only after demonstrating these efforts would the lender compile the UPP for guaranty purchase.
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.
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