Glossary · The loan itself
Guaranty(guarantee)
In short
The SBA's promise to cover 75–85% of the bank's loss if you default. It protects the bank. You still owe the full loan.
What it means in a deal
The SBA guaranty is what makes the whole program work: the bank takes the credit risk on paper, but the government absorbs most of the downside if you can't pay. The guaranty percentage is 85% on loans up to $150K and 75% above that. As a buyer this means the bank is underwriting you knowing they're partially insured — but a default still triggers the SBA's recovery process against you, your business assets, and your personal guarantee, so the protection runs one direction.
Official sources
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
7(a) Loan Program — Terms, Conditions, and Eligibility
U.S. Small Business Administration · Official SBA source
Last checked 2026-06-16. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Guaranty
- What impact does a lender's failure to obtain a required personal guaranty have on a guaranty purchase request?
- What is the impact on the SBA guaranty if a lender failed to obtain a required personal guaranty from a principal?
- What impact does a lender's failure to obtain a required personal guaranty from a principal have on a 7(a) guaranty purchase request?
- What does 'SBA guaranty' mean for my business loan application?
- What is the purpose of the SBA's loan guaranty?
- What are the personal guaranty requirements for owners and affiliates?
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 2026-06-16 · 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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