For SBA lenders
Short answer
A lender submits a "repair" or "denial" report when the SBA identifies non-compliance with loan program requirements that impacts the guaranty, either partially reducing or entirely denying coverage.
The terms "repair" and "denial" refer to the SBA's actions when reviewing a lender's request for guaranty purchase. A "repair" is a reduction in the amount the SBA will honor on its guaranty due to specific instances of non-compliance (e.g., failure to properly collateralize, servicing errors). A "denial" means the SBA will not honor any portion of the guaranty due to severe or incurable non-compliance (e.g., eligibility issues, fraud). Lenders submit documentation to address these findings.
After a loan default and lender's UPP submission, the SBA finds that the lender failed to obtain a required personal guaranty from a 25% owner. The SBA then issues a "repair" notice, reducing its guaranty payout by the percentage attributable to that missing guaranty.
Insider move
Lenders must understand the common reasons for repairs and denials to mitigate these risks proactively during origination, servicing, and liquidation. Diligent adherence to SBA policies is critical to protect the full guaranty.
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.
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