Abandonment of collateral with recoverable value ≥ $10,000 real property/ > $5,000 personal property (requires exception to policy).Ī non-PCLP CDC must receive the SBA’s written pre-approval for all of the following liquidation actions:.Initiation of eviction proceedings-non-routine litigation and.Approving short sale with release of obligors.Approving short sale with less than 100% of net proceeds to TPL or 504 loan.Appointment receiver (requires SBA approved litigation plan).Initiation of non-judicial foreclosure (requires assignment of note & deed of trust or mortgage).Initiation of judicial foreclosure (requires assignment of note & deed of trust or mortgage).Acceptance of a deed-in-lieu of foreclosure.Release of lien on collateral with fair market value ≥ 10% of debenture amount or $10,000.See SOP 50 51 3.Ī PLCP CDC must receive the SBA’s written pre-approval for all of the following liquidation actions: However, SBA Loan Centers may authorize non-PCLP CDCs and non-ACL CDCs to liquidate 504 loans on a case-by-case basis. SBA Loan Centers are primarily responsible for liquidating 504 loans of non-PCLP CDCs and non-ACL CDCs. Non-ACL PCLP CDCs are responsible for liquidating only the PCLP 504 loans in its portfolio. A CDC that is authorized to act as an ACL is responsible for liquidating all of the 504 loans in its portfolio. The liquidation authority of CDCs is based on its designation as an Authorized CDC Liquidator (“ACL”), a Premier Certified Lender Program (“PCLP”), a non-PCLP CDC, or a non-ACL. What Liquidation Actions Require SBA’s Pre-Approval? If the CDC does not obtain the SBA’s written pre-approval, the SBA may decline to pay for all, or a portion of, the legal fees and/or other costs incurred in connection with the liquidation.
However, when a default cannot be cured, the 504 loan is transferred into liquidation status and the debenture is purchased by the SBA, the CDC may become responsible for liquidating the debt.Īlthough the CDC may have unilateral authority to take all necessary actions to liquidate 504 loans in their portfolio, some liquidation actions require the SBA’s written pre-approval before the CDC can take action.
#Pclp energy series
Part II in this blog series addresses the liquidation actions that require the SBA’s pre-approval for loans made under Title V of the Small Business Investment Act.Ĭertified Development Companies (“CDC”) should make a good faith effort to work with delinquent borrowers to bring their Small Business Administration (“SBA”) loans current.
This article is Part II of a two-part blog series, designed to assist 7(a) lenders and Certified Development Companies in determining which liquidation actions require SBA’s pre-approval on SBA loans.
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