Glossary · Doing the deal
Diligent Servicing Action
In short
The steps a lender must take to service an SBA loan, especially when it's in default, to protect the SBA's interest. This ensures the lender follows proper procedures.
What it means in a deal
If your loan defaults, your lender is required to take diligent servicing actions, which include attempting to collect, securing collateral, and eventually liquidating assets if necessary. These actions must comply with SBA rules to ensure the guaranty remains valid.
Official sources
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Diligent Servicing Action
- What specific actions constitute an 'unapproved material servicing action' that could lead to a 7(a) guaranty repair or denial?
- How does an unapproved material servicing action impact the SBA's 7(a) loan guaranty?
- When can a lender request prior approval from the SBA for a significant servicing action?
- What information must a lender provide to the SBA when requesting prior approval for a significant servicing action?
- What is the impact of an unapproved material servicing action on the SBA's 7(a) loan guaranty?
- What constitutes a 'material change' to collateral that requires prior SBA approval for a 7(a) loan servicing action?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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