Glossary · The loan itself
Repair to the guaranty
In short
This occurs when the SBA reduces the amount it pays a lender on a defaulted loan due to a lender's error. For you, it means your lender might become more aggressive in collecting from you.
What it means in a deal
If the SBA finds the lender didn't follow rules (e.g., imprudent lending, unauthorized servicing), they'll "repair" or reduce their guaranty payment. This doesn't reduce your obligation to repay the loan, but it motivates the lender to pursue all available avenues, including your personal guarantee, more vigorously.
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 Repair to the guaranty
- What constitutes a "repair" to the SBA guaranty during a purchase request?
- What common underwriting errors typically lead to an SBA 7(a) loan guaranty repair?
- What constitutes a 'failure to adhere to prudent lending standards' that could lead to a guaranty repair?
- How does a lender ensure the loan authorization precisely matches final closing documents to avoid guaranty repair?
- Can a lender appeal an SBA decision to repair or deny a guaranty purchase request?
- What is the process for a lender to appeal an SBA decision to repair or deny a 7(a) loan guaranty?
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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