{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/what-specific-lender-actions-or-omissions-during-underwriting-are-most-likely-to-result-in","api_url":"https://dealroom.so/api/public/questions/what-specific-lender-actions-or-omissions-during-underwriting-are-most-likely-to-result-in","question":"What specific lender actions or omissions during underwriting are most likely to result in a 'repair' of the SBA guaranty?","topic":"Repairs & Denials","audience":"lender","bot_mode":"lender","short_answer":"Common actions leading to repair include inadequate equity injection verification, insufficient collateral perfection, failure to verify eligibility (e.g., size, criminal history), or unapproved material deviations from the loan authorization.","rule":"A guaranty repair occurs when the SBA determines that the lender failed to adhere to SBA loan program requirements, prudent lending standards, or the loan authorization. The SBA reduces the guaranteed portion by a specified amount, reflecting the lender's non-compliance.","example":"A lender approves a $1.5M acquisition loan where the borrower's equity injection was sourced from an undisclosed personal loan. Upon default, the SBA reviews the UPP and discovers the improper equity source. The SBA issues a guaranty repair, reducing the amount it will purchase by 10% of the guaranteed portion due to the lender's failure to verify proper equity.","what_lenders_check":"Lenders must rigorously adhere to all SBA requirements and prudent lending standards during underwriting and closing. Proactive identification and correction of issues before default are critical to minimize the risk of guaranty repair and maximize recovery.","required_facts":["Inadequate equity verification","Unperfected collateral","Eligibility oversight","Authorization deviations"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","SOP 50 57 - 7(a) Loan Servicing and Liquidation","Universal Purchase Package (UPP)","13 CFR Part 120 - Business Loans"],"official_sources":[{"title":"SOP 50 10 - Lender and Development Company Loan Programs","url":"https://www.sba.gov/sites/default/files/2025-05/SOP%2050%2010%208%20Technical%20Updates%20effective%206.1.2025.docx"},{"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":"What specific lender errors typically result in a 'repair' of the 7(a) guaranty during liquidation?","url":"https://dealroom.so/for-lenders/questions/what-specific-lender-errors-typically-result-in-a-repair-of-the-7-a-guaranty-during-liquid"},{"question":"What common lender errors typically result in a \"repair\" of the SBA 7(a) loan guaranty during liquidation?","url":"https://dealroom.so/for-lenders/questions/what-common-lender-errors-typically-result-in-a-repair-of-the-sba-7-a-loan-guaranty-during"},{"question":"What constitutes a \"material misrepresentation\" by a borrower that could lead to a 7(a) guaranty denial?","url":"https://dealroom.so/for-lenders/questions/what-constitutes-a-material-misrepresentation-by-a-borrower-that-could-lead-to-a-7-a-guara"},{"question":"How does a lender prevent a guaranty denial related to undisclosed affiliations identified post-closing?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-prevent-a-guaranty-denial-related-to-undisclosed-affiliations-identified"},{"question":"What specific examples of failing 'prudent lending standards' by a lender can lead to a repair or denial of a 7(a) guaranty?","url":"https://dealroom.so/for-lenders/questions/what-specific-examples-of-failing-prudent-lending-standards-by-a-lender-can-lead-to-a-repa"},{"question":"How does inadequate collateral documentation by a lender lead to a repair or denial of the SBA 7(a) guaranty?","url":"https://dealroom.so/for-lenders/questions/how-does-inadequate-collateral-documentation-by-a-lender-lead-to-a-repair-or-denial-of-the"}],"related_terms":[{"term":"Lender underwriting","url":"https://dealroom.so/glossary/lender-underwriting"},{"term":"Repair to the guaranty","url":"https://dealroom.so/glossary/repair-to-the-guaranty"},{"term":"Repair","url":"https://dealroom.so/glossary/repair"},{"term":"Specific Lien","url":"https://dealroom.so/glossary/specific-lien"},{"term":"Unauthorized servicing actions","url":"https://dealroom.so/glossary/unauthorized-servicing-actions"},{"term":"Underwriting","url":"https://dealroom.so/glossary/underwriting"}],"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":"2026-06-14","sba_rule_sources_checked_through":"2026-06-14"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/for-lenders/questions/what-specific-lender-actions-or-omissions-during-underwriting-are-most-likely-to-result-in","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."]}