{"ok":true,"canonical_url":"https://dealroom.so/glossary/loss-calculation","api_url":"https://dealroom.so/api/public/glossary/loss-calculation","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":"loss-calculation","term":"Loss Calculation","group":"The loan itself","definition":"How the SBA determines the amount it will pay a lender when a guaranteed loan defaults. It involves subtracting any recoveries the lender made from the outstanding principal and interest.","what_it_means":"If your business defaults on an SBA loan, the SBA will calculate its loss based on the outstanding balance, interest, and any liquidation expenses, less any proceeds from selling collateral. As the buyer, your primary concern is to avoid default by running a successful business, but understanding this shows how the SBA protects lenders.","url":"https://dealroom.so/glossary/loss-calculation","official_sources":[{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"},{"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-default","term":"Loan default","url":"https://dealroom.so/glossary/loan-default"},{"slug":"liquidation-plan","term":"Liquidation Plan","url":"https://dealroom.so/glossary/liquidation-plan"},{"slug":"sba-guaranty","term":"SBA guaranty","url":"https://dealroom.so/glossary/sba-guaranty"},{"slug":"guaranty-purchase-request","term":"Guaranty purchase request","url":"https://dealroom.so/glossary/guaranty-purchase-request"}],"related_questions":[{"question":"What steps must a lender take to mitigate loss during loan liquidation before submitting a Universal Purchase Package (UPP)?","url":"https://dealroom.so/for-lenders/questions/what-steps-must-a-lender-take-to-mitigate-loss-during-loan-liquidation-before-submitting-a"},{"question":"What are the specific requirements for naming the lender as the loss payee on a life insurance policy collateral assignment?","url":"https://dealroom.so/for-lenders/questions/what-are-the-specific-requirements-for-naming-the-lender-as-the-loss-payee-on-a-life-insur"},{"question":"What specific steps must a lender take to mitigate loss during loan liquidation before submitting a Universal Purchase Package (UPP)?","url":"https://dealroom.so/for-lenders/questions/what-specific-steps-must-a-lender-take-to-mitigate-loss-during-loan-liquidation-before-sub"},{"question":"How does a seller note on full standby affect the debt service coverage ratio calculation?","url":"https://dealroom.so/sba-7a/questions/how-does-a-seller-note-on-full-standby-affect-the-debt-service-coverage-ratio-calculation"},{"question":"How does the '90-day rule' affect the calculation of SBA upfront guaranty fees for multiple loans?","url":"https://dealroom.so/for-lenders/questions/how-does-the-90-day-rule-affect-the-calculation-of-sba-upfront-guaranty-fees-for-multiple-"},{"question":"How does the ongoing servicing fee affect the annual percentage rate (APR) calculation for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/how-does-the-ongoing-servicing-fee-affect-the-annual-percentage-rate-apr-calculation-for-a"}]},"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 — Loss Calculation","url":"https://dealroom.so/glossary/loss-calculation","source_type":"DealRoom Data"}}