Glossary · The loan itself
Imprudent lending
In short
This refers to a lender making a loan without following sound underwriting practices or without sufficient assurance of repayment. The SBA can deny its guaranty if the lender acted imprudently.
What it means in a deal
The SBA requires lenders to use
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 Imprudent lending
- What constitutes prudent lending standards for SBA 7(a) underwriting?
- What specific advantages does the SBA guaranty offer to the *lending bank*?
- What does the SBA 'guaranty' really mean for a bank lending money?
- What constitutes prudent lending standards for SBA 7(a) underwriting regarding credit analysis?
- How does the SBA assess "prudent lending standards" in 7(a) loan underwriting?
- How does the 'not engaged in lending' rule apply to a loan applicant?
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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