For SBA lenders
Short answer
An unapproved material servicing action can result in a repair to the SBA guaranty, reducing the guaranteed percentage, or in severe cases, a full denial of the guaranty purchase request.
SOP 50 57 clearly states that lenders must obtain prior SBA approval for certain material servicing actions. Performing such actions without approval constitutes a non-compliance that can lead to a repair, where the SBA reduces its share of the loss, or a denial, if the action significantly prejudiced the SBA's position.
A lender, without SBA approval, released a significant piece of collateral that was crucial to the loan's security. Upon default and guaranty purchase request, the SBA denies the claim due to the unapproved and material collateral release.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 57 - 7(a) Loan Servicing and Liquidation
Servicing and Liquidation Actions 7(a) Lender Matrix
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.
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