Glossary · The loan itself
In short
This occurs when the lender asks the SBA to honor its promise to cover a portion of a defaulted loan. It happens after the borrower stops making payments and the lender has exhausted all other recovery efforts.
If your business loan defaults, the lender will first try to liquidate collateral and collect from personal guarantees. Only after these steps, and if there's still a shortfall, does the lender "call the guaranty," meaning they request the SBA to pay its guaranteed percentage of the remaining loss.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Defined by DealRoom.so SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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