Glossary · The loan itself
In short
This is when a lender asks the SBA to honor its government guaranty after a borrower defaults and the lender has exhausted all recovery efforts. It's the official request for the SBA to pay out.
If your SBA 7(a) loan defaults and the lender can't recover enough from collateral or personal guarantees, they'll submit a guaranty purchase claim to the SBA. The SBA then reviews the lender's servicing and liquidation efforts before paying the guaranteed portion. This is a post-default event.
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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