Publications

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 https://www.sba.gov/sites/default/files/articles/5000-1358-New-SOP-50-57.pdf. Lerch Early will be holding a seminar on the updates; please email Anne Core at ascore@lerchearly.com 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 awrind@lerchearly.com 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.

Share

Email Confirmation

Thank you for your interest in Lerch, Early & Brewer. Please be aware that unsolicited e-mails and information sent to Lerch Early though our web site will not be considered confidential, may not receive a response, and do not create an attorney-client relationship with Lerch Early Brewer. If you are not already a client of Lerch Early, do not include anything confidential or secret in this e-mail. Also, please note that our attorneys do not seek to practice law in any jurisdiction in which they are not authorized to do so.

By clicking "OK" you acknowledge that, unless you are a current client, Lerch Early does not have any obligation to maintain the confidentiality of any information you send us.