Glossary · The loan itself
In short
When a lender fails to properly assess a borrower's creditworthiness, collateral, or the business's ability to repay the loan. This can lead to a loan default and potentially an SBA guaranty purchase denial.
If your lender performs inadequate underwriting, the SBA can deny the guaranty if the loan defaults. This means the lender takes the full loss. As a buyer, ensure your lender is thorough and follows SBA rules, as their mistakes can delay your closing or even jeopardize the loan's approval.
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.
See which SBA lenders would fund your deal
Tell us the business, the price, and where you are — we'll point you to the lenders most likely to approve a 7(a) like yours and flag what trips up approval.
Free · No documents · Usually same-day