Glossary · Doing the deal
Servicing and liquidation
In short
The two post-disbursement phases of an SBA loan: "servicing" involves managing the loan throughout its life, and "liquidation" is the process of recovering funds if the loan defaults.
What it means in a deal
After your loan closes, the lender "services" it, handling payments, modifications, and compliance. If a default occurs, the loan moves to "liquidation," where the lender attempts to recover assets. Understanding these phases clarifies the long-term obligations and risks of your SBA loan.
Official sources
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Servicing and liquidation
- Post-secondary market sale, what are the lender's continuing obligations regarding servicing, reporting, and liquidation of the unguaranteed portion of a 7(a) loan?
- How is the ongoing servicing fee calculated and remitted to the SBA?
- How are the ongoing servicing fees for an SBA 7(a) loan calculated and paid?
- Are there any other lender-specific fees beyond the SBA guaranty fee and ongoing servicing fee?
- What minimum efforts must a lender demonstrate in collection and recovery before submitting a liquidation plan to the SBA?
- Are there annual servicing fees or other recurring charges beyond the SBA servicing fee?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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