{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-typically-calculate-the-amount-of-guaranty-honored-if-a-repair-is-applied","api_url":"https://dealroom.so/api/public/questions/how-does-the-sba-typically-calculate-the-amount-of-guaranty-honored-if-a-repair-is-applied","question":"How does the SBA typically calculate the amount of guaranty honored if a repair is applied due to lender error?","topic":"Guaranty Purchase / UPP","audience":"lender","bot_mode":"lender","short_answer":"If a guaranty repair is applied, the SBA reduces the amount it will honor based on the financial impact of the lender's error. The reduction is proportionate to the loss directly attributable to the non-compliance.","rule":"A guaranty repair occurs when the SBA determines that a lender's actions or omissions violated SBA requirements, but the violation was not severe enough for a full denial. The SBA will calculate the financial loss directly associated with the lender's failure and reduce the amount of the guaranty it will purchase by that amount. This ensures the lender bears some responsibility for their non-compliance.","example":"A lender fails to properly perfect a lien on $100,000 of equipment, and this equipment is lost during liquidation. If the original guaranty was 75% on a $1 million loan, the SBA might reduce the guaranty purchase amount by 75% of the $100,000 loss, effectively making the lender absorb $75,000.","what_lenders_check":"Lenders must be aware that even minor errors can lead to a guaranty repair, reducing their recovery. Accurate documentation and strict adherence to SBA rules minimize the risk of repairs.","required_facts":["Guaranty repair","Lender error","Guaranty calculation","Loss impact","Non-compliance"],"source_families":["SOP 50 57 - 7(a) Loan Servicing and Liquidation","Universal Purchase Package (UPP)","13 CFR Part 120 - Business Loans"],"official_sources":[{"title":"SOP 50 57 - 7(a) Loan Servicing and Liquidation","url":"https://www.sba.gov/sites/default/files/2025-09/FINAL%20SOP%205057%204%20version.pdf"},{"title":"Universal Purchase Package (UPP)","url":"https://www.sba.gov/sites/default/files/2026-05/UPPv5.2.pdf"},{"title":"13 CFR Part 120 - Business Loans","url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120"}],"related_questions":[{"question":"How should a lender document eligible liquidation expenses within the UPP for a 7(a) guaranty purchase?","url":"https://dealroom.so/for-lenders/questions/how-should-a-lender-document-eligible-liquidation-expenses-within-the-upp-for-a-7-a-guaran"},{"question":"What critical information often missing from a Universal Purchase Package (UPP) leads to an SBA request for more information?","url":"https://dealroom.so/for-lenders/questions/what-critical-information-often-missing-from-a-universal-purchase-package-upp-leads-to-an-"},{"question":"How does a lender handle an SBA decision to repair a guaranty due to a minor documentation error during UPP review?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-handle-an-sba-decision-to-repair-a-guaranty-due-to-a-minor-documentation"},{"question":"What is the primary purpose of the Universal Purchase Package (UPP)?","url":"https://dealroom.so/for-lenders/questions/what-is-the-primary-purpose-of-the-universal-purchase-package-upp"},{"question":"What is the key impact of a 'repair' on an SBA guaranty purchase request?","url":"https://dealroom.so/for-lenders/questions/what-is-the-key-impact-of-a-repair-on-an-sba-guaranty-purchase-request"},{"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"}],"related_terms":[{"term":"SBA guaranty repair","url":"https://dealroom.so/glossary/sba-guaranty-repair"},{"term":"Repair or denial of the SBA guaranty","url":"https://dealroom.so/glossary/repair-or-denial-of-the-sba-guaranty"},{"term":"Repair of Guaranty","url":"https://dealroom.so/glossary/repair-of-guaranty"},{"term":"Repair to the guaranty","url":"https://dealroom.so/glossary/repair-to-the-guaranty"},{"term":"Repair of the guarantee","url":"https://dealroom.so/glossary/repair-of-the-guarantee"},{"term":"Cancellation of the SBA guaranty","url":"https://dealroom.so/glossary/cancellation-of-the-sba-guaranty"}],"related_tools":[{"name":"SBA 7(a) payment & fee calculator","url":"https://dealroom.so/sba-7a/calculator"},{"name":"Find an active SBA 7(a) lender","url":"https://dealroom.so/lenders"}],"data_freshness":{"last_reviewed":"2026-06-13","sba_rule_sources_checked_through":"2026-06-13"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-typically-calculate-the-amount-of-guaranty-honored-if-a-repair-is-applied","source_type":"DealRoom Q&A"},"caveats":["Grounded in the current SBA rulebook; verify against official sources before relying on it for a live deal.","Not legal, tax, or financial advice and not an approval decision."]}