Glossary · The loan itself
Technical default
In short
This occurs when a borrower violates a non-payment term or condition of their loan agreement, even if all payments are current. You care because a technical default can trigger lender action, including accelerating the loan, if not remedied.
What it means in a deal
Examples include failing to maintain required insurance, not providing financial statements when due, or making a significant change in business ownership without lender consent. Understand all covenants in your loan agreement to avoid unintentional breaches.
Related terms
Common questions about Technical default
- What happens if I default on an SBA 7(a) loan?
- 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?
- Will a past federal student loan default, now rehabilitated, affect my SBA 7(a) loan approval?
- What are the specific consequences if I default on my personal guaranty for an SBA loan?
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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