Preferred Lender Program Law and Legal Definition
Preferred Lender Program or PLP is one of the procedures undertaken by Small Business Administration (SBA) to provide financial assistance to the small business community. SBA nominates the PLP lenders who have demonstrated a proficiency in processing and servicing SBA-guaranteed loans. The lenders should have a satisfactory performance history with SBA. Once nominated, SBA delegates the final credit decision and most servicing and liquidation authority and responsibility to these lenders. Before it can operate as a PLP Lender, the approved Lender must execute a Supplemental Guarantee Agreement, which will specify a term not to exceed two years. In case of default by the borrower and the need for enforced collections, the PLP lender agrees to liquidate all business assets before asking SBA to honor its guaranty.
Legal Definition list
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