{"ok":true,"canonical_url":"https://dealroom.so/glossary/lender-s-default","api_url":"https://dealroom.so/api/public/glossary/lender-s-default","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"lender-s-default","term":"Lender's Default","group":"Doing the deal","definition":"This occurs when the lender fails to uphold its obligations under the loan agreement, like failing to disburse funds. It's rare but can disrupt your acquisition and cause financial harm.","what_it_means":"While the SBA backs a portion of the loan, the lender is responsible for its terms. If a lender defaults on its commitments, you may have legal recourse. Your loan agreement should clearly outline the lender's obligations and your rights in such a scenario.","url":"https://dealroom.so/glossary/lender-s-default","official_sources":[{"slug":"13-cfr-part-120","title":"13 CFR Part 120 — Business Loans","official_url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120","official_label":"View on eCFR","authority_tier":1,"publisher":"Office of the Federal Register","source_guide_url":"https://dealroom.so/sba-7a/sources/13-cfr-part-120"}],"related":[{"slug":"loan-agreement","term":"Loan agreement","url":"https://dealroom.so/glossary/loan-agreement"},{"slug":"loan-default","term":"Loan default","url":"https://dealroom.so/glossary/loan-default"},{"slug":"servicing-deficiency","term":"Servicing deficiency","url":"https://dealroom.so/glossary/servicing-deficiency"},{"slug":"commitment-letter","term":"Commitment Letter","url":"https://dealroom.so/glossary/commitment-letter"}],"related_questions":[{"question":"What are a lender's primary responsibilities once a 7(a) loan enters liquidation after default?","url":"https://dealroom.so/for-lenders/questions/what-are-a-lender-s-primary-responsibilities-once-a-7-a-loan-enters-liquidation-after-defa"},{"question":"What are a lender's primary responsibilities immediately after a 7(a) loan enters liquidation after default?","url":"https://dealroom.so/for-lenders/questions/what-are-a-lender-s-primary-responsibilities-immediately-after-a-7-a-loan-enters-liquidati"},{"question":"How does a lender request an SBA guaranty purchase after loan default?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-request-an-sba-guaranty-purchase-after-loan-default"},{"question":"What is the SBA's expectation for a lender's 'workout plan' for a defaulted 7(a) loan prior to liquidation?","url":"https://dealroom.so/for-lenders/questions/what-is-the-sba-s-expectation-for-a-lender-s-workout-plan-for-a-defaulted-7-a-loan-prior-t"},{"question":"What specific steps must a lender take to secure collateral immediately upon a 7(a) loan default?","url":"https://dealroom.so/for-lenders/questions/what-specific-steps-must-a-lender-take-to-secure-collateral-immediately-upon-a-7-a-loan-de"},{"question":"What is the timeframe for a lender to submit a Universal Purchase Package (UPP) after loan default?","url":"https://dealroom.so/for-lenders/questions/what-is-the-timeframe-for-a-lender-to-submit-a-universal-purchase-package-upp-after-loan-d"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Lender's Default","url":"https://dealroom.so/glossary/lender-s-default","source_type":"DealRoom Data"}}