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# 7(a) / Express servicing

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## Content

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## Unilateral actions

SBA has substantially shortened the list of actions requiring prior SBA approval and standardized them across lending programs where possible in order to assist lenders in taking prompt and responsible servicing and recovery actions.  Please refer to the Servicing and Liquidation Actions 7(a) Lender Matrix for additional information.

Lenders must document the business reason and justification for their decisions and retain these and supporting documents, as outlined in SOP 50 57-2, Chapter 6 and Chapter 8, in the loan file for future SBA review to determine if the actions taken were prudent, commercially reasonable (consistent with generally accepted commercial lending practices) and complied with applicable loan program requirements. When taking action that falls within a lender's unilateral authority, the lender is encouraged to notate the loan file with a statement such as, "This action was taken under unilateral authority." (It is recommended that the lenders retain a copy of the matrix in effect at the time of the request and attach it to the action in their file.) It is important to note that **if the lender notifies SBA of a change by E-Tran, then a separate notification to the Center is unnecessary.**

Please email notification of unilateral servicing actions to the appropriate Commercial Loan Service Center (CLSC).  When submitting an action to SBA, lenders should reference the ten-digit SBA loan number; lenders will receive confirmation from the servicing center that the servicing request was received. This will be the only communication lenders will receive under the streamlined process for handling unilateral actions. It is very important that lenders notify SBA of all unilateral actions where SBA notification is required so SBA's loan database can be updated. This is critical for secondary market sales.

## E-Tran servicing

 

SBA encourages all lenders to become familiar with and use E-Tran, which permits lenders to make many changes to their SBA loan record using a direct connection via the internet. E-Tran allows lenders to process the following actions without any sort of submission to the SBA:

•    Cancel undisbursed loan•    Terminate guaranty on disbursed loan•    Decrease loan amount or guaranty percentage on an undisbursed loan•    Change the use of proceeds, which does not involve an increase to a loan•    Change the maturity date or months on loans which have not matured•    Change loans from revolver to term•    Change legal/trade name or address•    Change project from rural to urban or vice versa•    Change principal(s) gender, race, veteran status, citizenship•    Add borrower(s) or guarantor(s)

Each month, the commercial loan service centers receive hundreds of loan servicing actions which can be processed under the lender’s delegated unilateral servicing authority. Many common unilateral servicing actions do not require any sort of submission to SBA. Please refer to the Servicing and Liquidation Actions 7(a) Lender Matrix for additional information. Use this E-Tran link to sign in. 

## Notify SBA of liquidation

Lenders are required to notify the appropriate CLSC by reporting the loan in liquidation status on the 1502 Report or updating the status in E-Tran servicing.

## Actions requiring prior SBA approval

Please refer to the Servicing and Liquidation Actions 7(a) Lender Matrix. 

## Request a servicing action

A clear and concise cover letter drawn from information in the lender internal credit memorandum generally suffices as the servicing request. If the cover letter addresses the request and describes the supporting analysis, lenders do not need to submit additional information. SBA reserves the right, however, to request additional information as individual circumstances require.

Please submit servicing requests to the appropriate CLSC.

Servicing actions, other than unilateral actions, should include the lender internal credit memorandum with the servicing request (refer to SOP 50 57-2, Chapter 6). If the credit memorandum includes an analysis of the borrower’s financial statements, **please do not submit a copy of the financial statements**. Similarly, if the credit memo describes the collateral analysis and basis for collateral valuation, **please do not submit copies of appraisals or other documents related to collateral**. Instead, the Servicing Action Supporting Schedule may be submitted to either center in order to facilitate review.

In general, servicing requests must address a common set of elements. These elements allow the lender and SBA to quickly understand the request, the status of the SBA loan(s), the condition of the borrower’s business and other factors important to the decision.

Further guidance on submitting servicing requests can be found in SOP 50 57 2.

## Additional forms

Servicing requests may also require some of the following forms:
                  - For reinstatements                     - Reinstatement of SBA Guaranty  for loans that have been erroneously reported as paid in full
                    - Request Loan reinstatement  for loans that have been cancelled due to non-payment of SBA guaranty fee 
                  - Transfer of Participation Request Form and Agreement
                  - A  Servicing Action Supporting Schedule  may be submitted in order to facilitate review

## Contact us

Lenders are encouraged check out our FAQs regarding Payment Modifications or to contact the appropriate Commercial Loan Service Center.