SBA Issues New SOP on 7(a) Loan Servicing and Liquidation

Commercial Lending Bulletin

Late last year, the Small Business Administration issued SOP 50 57 2, related to 7(a) loan servicing and liquidation policy and procedures, which became effective December 1, 2015. Key changes include the following:

  • Updated definition of prudent liquidation
  • 120-day annual service fee
  • Deadline for resolving purchased loans
  • Clarification about revolving lines of credit, including early default
  • Servicing and liquidating small loans
  • Which actions require e-Tran
  • Guidance on credit bureau reporting requirements
  • Guidance on charge off procedures
  • Reporting requirements
  • Requirements for returning loans to regular servicing
  • Considerations for using receiverships in liquidation situations
  • Expenses clarification
  • 1099-C forms

For more information, visit Lerch Early will be holding a seminar on the updates; please email Anne Core at if you’d like to be included on the invitation list.

Alison Rind is a commercial lending attorney at Lerch, Early & Brewer who represents commercial lenders in loan transactions and other commercial matters, including participants in SBA and other government guaranteed lending programs. For more information about the new SOP, contact Alison at or (301) 657-0750.

This content is for your information only and is not intended to constitute legal advice. Please consult your attorney before acting on any information contained here.


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