{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/what-are-the-common-reasons-for-the-sba-to-deny-a-guaranty-purchase-request-resulting-in-a","api_url":"https://dealroom.so/api/public/questions/what-are-the-common-reasons-for-the-sba-to-deny-a-guaranty-purchase-request-resulting-in-a","question":"What are the common reasons for the SBA to deny a guaranty purchase request, resulting in a 'repair' or 'denial'?","topic":"Guaranty Purchase / Repairs & Denials","audience":"lender","bot_mode":"lender","short_answer":"Common reasons for guaranty denials or repairs include imprudent lending practices, unauthorized servicing actions, failure to collateralize properly, or misrepresentations by the borrower not diligently discovered by the lender.","rule":"The SBA's guaranty is conditional. Lenders must adhere to prudent lending standards, SBA loan program requirements, and proper servicing and liquidation procedures. Deviations, such as unapproved changes to loan terms, failure to obtain required collateral, or not performing adequate due diligence, can lead to the SBA repairing or denying the guaranty.","example":"A lender requests guaranty purchase on a defaulted loan. The SBA discovers the lender failed to perfect its lien on a critical piece of equipment. This oversight results in a repair to the guaranty, reducing the amount the SBA will pay.","what_lenders_check":"Lenders' primary concern is protecting the guaranty. They meticulously follow SBA procedures to avoid any actions or omissions that could jeopardize the collectability of the guaranteed portion, which directly impacts their recovery on defaulted loans.","required_facts":["Imprudent lending","Unauthorized servicing","Collateral deficiencies","Inadequate due diligence","Misrepresentation"],"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":[],"related_terms":[{"term":"Guaranty purchase request","url":"https://dealroom.so/glossary/guaranty-purchase-request"},{"term":"Ineligible for SBA Guaranty","url":"https://dealroom.so/glossary/ineligible-for-sba-guaranty"},{"term":"Request for Additional Information","url":"https://dealroom.so/glossary/request-for-additional-information"},{"term":"Guaranty Request","url":"https://dealroom.so/glossary/guaranty-request"},{"term":"Repair to the guaranty","url":"https://dealroom.so/glossary/repair-to-the-guaranty"},{"term":"Request for Reconsideration","url":"https://dealroom.so/glossary/request-for-reconsideration"}],"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/what-are-the-common-reasons-for-the-sba-to-deny-a-guaranty-purchase-request-resulting-in-a","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."]}