Glossary · The loan itself
In short
This happens when a borrower or business doesn't meet SBA's specific criteria for a 7(a) loan, often discovered after closing. It can cause the SBA to deny its guaranty.
If the SBA finds out after your loan funds that you or the business were ineligible from the start, they can deny the guaranty to the lender. This puts the lender at full risk and can lead to them demanding immediate repayment. A thorough lender's underwriting process aims to prevent this.
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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