Glossary · The loan itself
Government Debt Default
In short
Failing to repay any debt owed to the U.S. government, including prior SBA loans, student loans, or taxes. This makes you ineligible for a new SBA loan.
What it means in a deal
Lenders check for prior government debt defaults as part of your eligibility. If you or any key principal has defaulted on government debt, you must resolve it before applying for an SBA 7(a) loan. This is a hard stop for eligibility.
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 Government Debt Default
- How does a borrower's prior federal debt delinquency or default (e.g., tax lien) impact their 7(a) loan eligibility?
- How does the lender determine if a prior federal debt delinquency or default (e.g., student loan, tax lien) impacts 7(a) loan eligibility?
- Can I get an SBA 7(a) loan if I have defaulted on a previous federal debt?
- What happens if a buyer has defaulted on a previous federal debt, like a student loan or a prior SBA loan?
- What happens if I default on an SBA 7(a) loan?
- How does a lender request an SBA guaranty purchase after loan default?
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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