For SBA lenders
Short answer
A "repair" is a reduction in the amount the SBA pays on its guaranty due to an identified deficiency or non-compliance by the lender, often for minor or curable issues that didn't directly cause the loss.
When a lender submits a guaranty purchase request, the SBA reviews the loan file for compliance with regulations and policies. If a minor non-compliance is found (e.g., missing documentation, minor servicing error), the SBA may opt to "repair" (reduce) the guaranty by a specific percentage or amount rather than denying it outright.
A lender requests guaranty purchase on a $500,000 loan. The SBA finds that a personal financial statement from one guarantor was slightly outdated but all other documents were in order. Instead of full denial, the SBA might repair the guaranty by 5%, reducing the payout.
Insider move
Lenders aim to avoid repairs by ensuring full compliance throughout the loan lifecycle, from origination to servicing and liquidation. Repairs reduce the recovery amount for the lender.
Universal Purchase Package (UPP)
SOP 50 57 - 7(a) Loan Servicing and Liquidation
Request to Honor SBA 7(a) Loan Guaranty
Last checked 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
More on repairs & denials
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