Should the applicant cancel / decline the loan or should you allow the agency (SBA) to cancel your loan?

If you follow the process of "No Communications" by not signing the loan documents SBA will follow it's agency cancellation policy and attempt to contact you before at and just past the signing expiration date. They will then wait for their loan QA department to determine you unresponsive and then decline your loan. This process is typically 60 to 90 days from the date of the loan offer.

Agency Cancellation C10. Failure to complete and return all loan closing documents.

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If applicant cancels the loan and specifies a reason the SBA will note and cancel the loan at that time.

Cancellation at Borrower's Request
C20. Adequate recovery from other sources.
C21. Reluctant to incur additional debt.
C22. Dissatisfied with loan terms and conditions.
C23. Dissatisfied with insurance requirements.
C24. Unwilling to pledge collateral.
C25. Did not need all the funds. – (Borrower Decision)
C26. Other reasons. – (Borrower Decision)
C27. Dissatisfied with loan interest rate (market rate). – (Borrower Decision)

If the applicant cancels the loan without a reason the SBA will apply a reason. This method may close the door for additional federal assistance.