Glossary · The loan itself
In short
This is when a lender requests the SBA to honor its promise to pay a portion of a defaulted 7(a) loan. It means the loan has failed, and the SBA is stepping in to cover the guaranteed percentage.
If an SBA 7(a) loan defaults and the lender's liquidation efforts don't recover the full amount, the lender "calls on the guaranty" with the SBA. The SBA then pays the lender the guaranteed percentage of the outstanding balance. As the buyer, you still owe the full amount, and the SBA will pursue collection if the lender couldn't.
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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