For SBA lenders
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.
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.
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.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
SOP 50 57 - 7(a) Loan Servicing and Liquidation
Universal Purchase Package (UPP)
Last checked 2026-06-14. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-14 · SBA sources checked through 2026-06-14. 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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