When is SBA released from liability on its guarantee?

CFR · 2024-01-01 · US · Title 13

(a) SBA is released from liability on a loan guarantee (in whole or in part, within SBA's exclusive discretion), if any of the events below occur: (1) The Lender has failed to comply materially with any Loan Program Requirement for 7(a) loans. (2) The Lender has failed to make, close, service, or liquidate a loan in a prudent manner; (3) The Lender's improper action or inaction has placed SBA at risk; (4) The Lender has failed to disclose a material fact to SBA regarding a guaranteed loan in a timely manner; (5) The Lender has misrepresented a material fact to SBA regarding a guaranteed loan; (6) SBA has received a written request from the Lender to terminate the guarantee; (7) The Lender has not paid the guarantee fee within the period required under SBA rules and regulations; (8) The Lender has failed to request that SBA purchase a guarantee within 180 days after maturity of the loan. However, if the Lender is conducting liquidation or debt collection litigation in connection with a loan that has matured, SBA will be released from its guarantee only if the Lender fails to request that SBA purchase the guarantee within 180 days after the completion of the liquidation or debt collection litigation; (9) The Lender has failed to use required SBA forms or exact electronic copies; or (10) The Borrower has paid the loan in full. (b) If SBA determines, at any time, that any of the events set forth in paragraph (a) of this section occurred in connection with that loan, SBA is entitl

official document · source cfr-2024 · id 13:§ 120.524