{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/what-are-the-risks-for-a-lender-holding-the-unguaranteed-portion-of-an-sba-7-a-loan","api_url":"https://dealroom.so/api/public/questions/what-are-the-risks-for-a-lender-holding-the-unguaranteed-portion-of-an-sba-7-a-loan","question":"What are the risks for a lender holding the unguaranteed portion of an SBA 7(a) loan?","topic":"Secondary Market","audience":"lender","bot_mode":"lender","short_answer":"Holding the unguaranteed portion means the lender bears 100% of the loss on that portion if the borrower defaults. This exposes the lender to significant credit risk, motivating the sale of the guaranteed portion.","rule":"The SBA guaranty only covers a percentage of the loan (e.g., 75% or 85%). The remaining portion is entirely at the lender's risk. If a loan defaults and liquidation proceeds are insufficient to cover the outstanding balance, the lender absorbs the loss on the unguaranteed portion first, before the SBA honors its guaranty on the protected portion. This inherent credit risk is why many lenders sell the guaranteed portion on the secondary market.","example":"A $1 million 7(a) loan with an 80% guaranty ($800,000 guaranteed, $200,000 unguaranteed) defaults. After liquidation, only $150,000 is recovered. The lender loses the full $200,000 unguaranteed portion, and the SBA covers 80% of the remaining $650,000 loss.","what_lenders_check":"Lenders must underwrite the entire loan amount, not just the guaranteed portion, to ensure prudent risk management. The unguaranteed portion represents their direct exposure, which influences their pricing and portfolio management decisions.","required_facts":["Unguaranteed portion","Credit risk","Lender loss","Loan default","Liquidation proceeds"],"source_families":["SOP 50 56 - Lender Participation Requirements","13 CFR Part 120 - Business Loans","7(a) Loan Program Terms, Conditions, and Eligibility"],"official_sources":[{"title":"SOP 50 56 - Lender Participation Requirements","url":"https://www.sba.gov/sites/default/files/2023-06/WF%20Attachment%20238243%20Final%20Closeout-%20SOP_50_56_6_07_2023_Final_.docx"},{"title":"13 CFR Part 120 - Business Loans","url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120"},{"title":"7(a) Loan Program Terms, Conditions, and Eligibility","url":"https://www.sba.gov/partners/lenders/7a-loan-program/terms-conditions-eligibility"}],"related_questions":[{"question":"What are the rules for a 7(a) lender to sell the guaranteed portion of a loan on the secondary market?","url":"https://dealroom.so/for-lenders/questions/what-are-the-rules-for-a-7-a-lender-to-sell-the-guaranteed-portion-of-a-loan-on-the-second"},{"question":"What is a lender's ongoing responsibility for servicing a 7(a) loan after selling the guaranteed portion on the secondary market?","url":"https://dealroom.so/for-lenders/questions/what-is-a-lender-s-ongoing-responsibility-for-servicing-a-7-a-loan-after-selling-the-guara"},{"question":"What documentation must a lender provide to the FTA when selling the guaranteed portion of a 7(a) loan on the secondary market?","url":"https://dealroom.so/for-lenders/questions/what-documentation-must-a-lender-provide-to-the-fta-when-selling-the-guaranteed-portion-of"},{"question":"What are the consequences for a lender if a previously sold guaranteed portion of a loan defaults due to lender error?","url":"https://dealroom.so/for-lenders/questions/what-are-the-consequences-for-a-lender-if-a-previously-sold-guaranteed-portion-of-a-loan-d"},{"question":"What are the lender requirements for pooling and selling the guaranteed portion?","url":"https://dealroom.so/for-lenders/questions/what-are-the-lender-requirements-for-pooling-and-selling-the-guaranteed-portion"},{"question":"What are the requirements for pooling and selling the guaranteed portion of a 7(a) loan on the secondary market?","url":"https://dealroom.so/for-lenders/questions/what-are-the-requirements-for-pooling-and-selling-the-guaranteed-portion-of-a-7-a-loan-on-"}],"related_terms":[{"term":"Unguaranteed portion","url":"https://dealroom.so/glossary/unguaranteed-portion"},{"term":"SBA 7(a) program","url":"https://dealroom.so/glossary/sba-7-a-program"},{"term":"SBA 7(a) loan","url":"https://dealroom.so/glossary/sba-7-a-loan"},{"term":"Aggregate SBA 7(a) Loan Eligibility","url":"https://dealroom.so/glossary/aggregate-sba-7-a-loan-eligibility"},{"term":"SBA 7(a) Loan Program","url":"https://dealroom.so/glossary/sba-7-a-loan-program"},{"term":"SBA 7(a) loan guaranty","url":"https://dealroom.so/glossary/sba-7-a-loan-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/what-are-the-risks-for-a-lender-holding-the-unguaranteed-portion-of-an-sba-7-a-loan","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."]}