{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/what-specific-actions-must-a-lender-take-if-a-secondary-market-investor-defaults-on-purcha","api_url":"https://dealroom.so/api/public/questions/what-specific-actions-must-a-lender-take-if-a-secondary-market-investor-defaults-on-purcha","question":"What specific actions must a lender take if a secondary market investor defaults on purchasing the guaranteed portion of a 7(a) loan?","topic":"Secondary market","audience":"lender","bot_mode":"lender","short_answer":"If a secondary market investor defaults, the lender must notify the SBA immediately, take possession of the guaranteed portion, and manage the loan internally or seek another investor.","rule":"In the event of a secondary market investor default, the originating lender must notify SBA's Fiscal and Transfer Agent and retrieve the note. The lender then resumes full responsibility for the guaranteed portion, effectively holding both the guaranteed and unguaranteed portions of the loan. The lender may then pursue other options, such as finding a new investor or retaining the guaranteed portion.","example":"A lender sold an $800,000 guaranteed portion of a 7(a) loan, but the investor failed to fund the purchase. The lender promptly contacts the SBA's transfer agent, retrieves the original guaranteed note, and documents the event. The lender then decides to hold the guaranteed portion in its own portfolio while exploring other potential buyers.","what_lenders_check":"Timely notification to the SBA and proper retrieval of documents are critical. The lender must ensure they have all necessary documentation to demonstrate continuous ownership and control of the guaranteed portion, especially in case of subsequent guaranty purchase requests.","required_facts":["Secondary market","Investor default","Guaranteed portion","SBA notification","Loan management"],"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 specific reporting requirements for lenders after selling the guaranteed portion of a 7(a) loan on the secondary market?","url":"https://dealroom.so/for-lenders/questions/what-are-the-specific-reporting-requirements-for-lenders-after-selling-the-guaranteed-port"},{"question":"What specific ongoing reporting obligations does a 7(a) lender have to the SBA after securitizing and selling the guaranteed portion of a loan on the secondary market?","url":"https://dealroom.so/for-lenders/questions/what-specific-ongoing-reporting-obligations-does-a-7-a-lender-have-to-the-sba-after-securi"},{"question":"What are a lender's ongoing servicing obligations after selling the guaranteed portion of a 7(a) loan on the secondary market?","url":"https://dealroom.so/for-lenders/questions/what-are-a-lender-s-ongoing-servicing-obligations-after-selling-the-guaranteed-portion-of-"},{"question":"What are the requirements for assigning secondary market loans through SBA Form 1088?","url":"https://dealroom.so/for-lenders/questions/what-are-the-requirements-for-assigning-secondary-market-loans-through-sba-form-1088"},{"question":"What are the key requirements for a lender to sell the guaranteed portion of a 7(a) loan on the secondary market?","url":"https://dealroom.so/for-lenders/questions/what-are-the-key-requirements-for-a-lender-to-sell-the-guaranteed-portion-of-a-7-a-loan-on"},{"question":"What specific representations and warranties must a lender make when selling the guaranteed portion of a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/what-specific-representations-and-warranties-must-a-lender-make-when-selling-the-guarantee"}],"related_terms":[{"term":"Secondary market investor","url":"https://dealroom.so/glossary/secondary-market-investor"},{"term":"Secondary Market","url":"https://dealroom.so/glossary/secondary-market"},{"term":"Secondary Market Sale","url":"https://dealroom.so/glossary/secondary-market-sale"},{"term":"Secondary market audit","url":"https://dealroom.so/glossary/secondary-market-audit"},{"term":"Secondary market purchaser","url":"https://dealroom.so/glossary/secondary-market-purchaser"},{"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-specific-actions-must-a-lender-take-if-a-secondary-market-investor-defaults-on-purcha","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."]}