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# Guaranty purchase

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## Content

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## Notify SBA of liquidation

Lenders are required to notify the appropriate Commercial Loan Service Center (CLSC) by reporting the loan in liquidation status on the 1502 Report or updating the status in E-Tran Servicing.

## Loan purchase request timing

Please refer to SBA’s liquidation SOP 50-57 for general guidance. Generally, unless SBA agrees in writing, the borrower must be in payment default more than 60 calendar days.
                  - For loans approved  on or after May 14, 2007 , unless the borrower has filed for bankruptcy, the Lender must complete all prudent and commercially reasonable efforts to liquidate the business personal property collateral with an aggregate Recoverable Value of $5,000 or more.
                  - For loans approved  prior to May 14, 2007 , the lender must liquidate all collateral and all cost-effective means of recovery must be exhausted unless the remaining principal balance of the loan is $50,000 or less; or the loan involves prolonged litigation or other circumstances that will extend the liquidation process more than 90 calendar days past the earliest date that the Lender could request guaranty purchase.

## Universal Purchase Package (UPP)

To request that SBA honor its guaranty on any loan approved under the 7(a) loan program, please submit the Universal Purchase Package to the appropriate Center:
                  - Universal Purchase Package (UPP)
                  - Universal Purchase Package (UPP) - Accessible

## Reimbursement of liquidation or legal fees

If the loan is ready for charge off, a lender may submit their request for reimbursement by submitting Care and Preservation of Collateral (CPC) Tabs and supporting documentation to the appropriate center listed below.

Also, if legal fees exceed $10,000 or are non-routine, lenders must obtain pre-approval. If the loan is not ready for charge off, Care and Preservation of Collateral (CPC) Tabs should be submitted with SBA Charge-Off Tabs and Wrap-Up Reports.

## Approval for litigation expenses

Lenders only need to obtain **pre-approval** for litigation expenses exceeding $10,000 or litigation that is non-routine. Refer to SOP 50 57-2, Chapter 21 and also Litigation Plan for 7(a) Loans.

If the litigation expenses are routine and less than $10,000 and the loan is ready for charge off, lender may submit their request for reimbursement by submitting Care and Preservation of Collateral (CPC) Tabs and supporting documentation the to the appropriate center listed below. If the loan is not ready for charge off, Care and Preservation of Collateral (CPC) Tabs should be submitted with SBA Charge-Off Tabs and Wrap-Up Reports.

## Contact us

To electronically submit your UPP, use the appropriate Box.com link or use our third-party secure transmission service SendThisFile which offers 128-bit encryption: