{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/what-is-the-key-impact-of-a-repair-on-an-sba-guaranty-purchase-request-for-a-defaulted-loa","api_url":"https://dealroom.so/api/public/questions/what-is-the-key-impact-of-a-repair-on-an-sba-guaranty-purchase-request-for-a-defaulted-loa","question":"What is the key impact of a 'repair' on an SBA guaranty purchase request for a defaulted loan?","topic":"Repairs & denials","audience":"lender","bot_mode":"lender","short_answer":"A 'repair' reduces the amount the SBA will pay on its guaranty by the amount of the loss directly attributable to the lender's non-compliance or error.","rule":"When the SBA identifies a non-curable defect or non-compliance with its regulations or prudent lending standards, it may 'repair' the guaranty. This means the SBA will not pay the lender the full guaranteed percentage but will instead reduce its payment by the amount of the loss that was caused by the lender's error. For example, if a $10,000 loss was due to a lender error, the SBA might reduce its 75% guaranty payment on a $100,000 loss from $75,000 to $65,000.","example":"A lender experiences a $100,000 loss on a 75% guaranteed loan. During the guaranty purchase review, the SBA finds the lender failed to properly perfect a lien on collateral valued at $15,000. The SBA repairs the guaranty, reducing its payout by $15,000, meaning the lender only receives $60,000 instead of $75,000.","what_lenders_check":"Lenders must understand that repairs shift a portion of the loss back to them. This emphasizes the importance of strict adherence to SBA regulations and prudent lending practices throughout the loan's lifecycle to protect the full value of the guaranty.","required_facts":["Guaranty reduction","Lender error","Non-compliance","Amount of loss","SBA payout"],"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":"When does a lender's failure to properly monitor collateral value during servicing result in a 7(a) guaranty repair?","url":"https://dealroom.so/for-lenders/questions/when-does-a-lender-s-failure-to-properly-monitor-collateral-value-during-servicing-result-"},{"question":"What specific underwriting failures or omissions by a lender are categorized as 'material non-compliance' by the SBA, risking 7(a) guaranty repair or denial?","url":"https://dealroom.so/for-lenders/questions/what-specific-underwriting-failures-or-omissions-by-a-lender-are-categorized-as-material-n"},{"question":"What constitutes 'material non-compliance' with SBA lending policies that typically leads to a guaranty repair or denial?","url":"https://dealroom.so/for-lenders/questions/what-constitutes-material-non-compliance-with-sba-lending-policies-that-typically-leads-to"},{"question":"Can an SBA 7(a) loan be repaired if the lender failed to ensure the borrower properly used all loan proceeds as authorized?","url":"https://dealroom.so/for-lenders/questions/can-an-sba-7-a-loan-be-repaired-if-the-lender-failed-to-ensure-the-borrower-properly-used-"},{"question":"What specific actions by a lender during loan origination would typically lead to a guaranty denial?","url":"https://dealroom.so/for-lenders/questions/what-specific-actions-by-a-lender-during-loan-origination-would-typically-lead-to-a-guaran"},{"question":"What constitutes a \"repair\" to the SBA guaranty during a purchase request?","url":"https://dealroom.so/for-lenders/questions/what-constitutes-a-repair-to-the-sba-guaranty-during-a-purchase-request"}],"related_terms":[{"term":"Guaranty purchase request","url":"https://dealroom.so/glossary/guaranty-purchase-request"},{"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":"Call on the guaranty","url":"https://dealroom.so/glossary/call-on-the-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-is-the-key-impact-of-a-repair-on-an-sba-guaranty-purchase-request-for-a-defaulted-loa","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."]}