For SBA lenders
Short answer
A 'repair' reduces the amount the SBA will pay on its guaranty, typically due to a lender's failure to adhere to specific program requirements, but does not deny the entire guaranty.
The SBA may 'repair' a guaranty if the lender committed an error that caused a loss, but the error was not severe enough to warrant a full denial of the guaranty. The repair amount usually reflects the portion of the loss attributable to the lender's specific non-compliance.
A lender failed to obtain an updated financial statement from a guarantor as required by the loan authorization. When the loan defaults, the SBA may impose a 10% repair on the guaranty amount, reducing the payout by that percentage due to the servicing deficiency.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 57 - 7(a) Loan Servicing and Liquidation
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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