For SBA lenders
Short answer
When selling the guaranteed portion, lenders make representations including valid endorsement, good title, valid guaranty, and compliance with all SBA rules and regulations.
Upon sale of the guaranteed portion of a 7(a) loan on the secondary market, the lender must provide specific representations and warranties to the purchaser and to the SBA. These typically confirm that the loan was originated and serviced in accordance with all SBA requirements, that the guaranty is valid and enforceable, and that the lender has not misrepresented any material facts.
A lender sells the guaranteed portion of a $1,000,000 7(a) loan. In the loan sale agreement, the lender warrants to the investor that the loan was properly underwritten, closed, and serviced per SBA SOPs, and that the SBA guaranty is in full force and effect without any known impairments.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 56 - Lender Participation Requirements
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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