(a) Closing. Except as set forth in this paragraph (a), SBA Express and Export Express Lenders must close their SBA Express and Export Express loans using the same documentation and procedures that they use for their similarly-sized, non-SBA guaranteed commercial loans. Such documentation and procedures must comply with law, prudent lending practices, and Loan Program Requirements. When closing an SBA Express or Export Express loan, the Lender must require the Borrower to execute a promissory note that is legally enforceable and assignable. Before the first disbursement of any SBA Express or Export Express loan proceeds, the Lender must obtain all required collateral, including obtaining valid and enforceable security interests in such collateral, and also must meet all other required pre-closing loan conditions as set forth in official SBA policy and procedures.

(b) Servicing, liquidation, and litigation. Servicing, liquidation, and litigation responsibilities for SBA Express and Export Express Lenders are set forth in subpart E of this part.

(c) SBA's purchase of the guaranteed portion of an SBA Express or Export Express loan—

(1) When SBA will purchase. SBA will purchase the guaranteed portion of an SBA Express or Export Express loan in accordance with §120.520 and official SBA policy and procedures. An SBA Express or Export Express Lender may not request purchase of the guaranty based solely on a violation of a non-financial default provision.

(2) Amount that SBA will pay upon purchase—

(i) SBA Express. SBA will pay a maximum of 50 percent of the total principal balance of the SBA Express loan outstanding after liquidation, plus up to 120 days of accrued interest at the rate in effect at the time of the earliest uncured default (if liquidation proceeds collected by the SBA Express Lender were insufficient for the Lender to recover a full 120 days of interest).

(ii) Export Express. SBA will pay a maximum of 75 or 90 percent (as applicable) of the total principal balance of the Export Express loan outstanding after liquidation, plus up to 120 days of interest at the rate in effect at the time of the earliest uncured default (if liquidation proceeds collected by the Export Express Lender were insufficient for the Lender to recover a full 120 days of interest).

(3) Release of SBA liability under its guarantee. SBA will be released from its liability to purchase the guaranteed portion of an SBA Express or Export Express loan, either in whole or in part, in SBA's sole discretion, under any of the circumstances described in §120.524.