Glossary · Doing the deal
Notice of Default
In short
A formal written notification from your lender stating that your loan is in default due to missed payments or other breaches of the loan agreement. It's a serious warning.
What it means in a deal
Receiving a Notice of Default means your lender has identified a breach of your loan agreement. This notice typically specifies the default and a period to cure it. Immediately consult with an attorney and your lender to understand your options and avoid further action.
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 Notice of Default
- What is the specific timeframe for a lender to notify the SBA of a 7(a) loan default?
- What happens if I default on an SBA 7(a) loan?
- What constitutes a "material default" by a 7(a) lender that would lead to an outright denial of a guaranty purchase request?
- How does a lender request an SBA guaranty purchase after loan default?
- What constitutes 'prudent liquidation' for a 7(a) loan to protect the SBA guaranty during default?
- What are a lender's primary responsibilities once a 7(a) loan enters liquidation after 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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