Glossary · The loan itself
In short
How the SBA determines the amount it will pay a lender when a guaranteed loan defaults. It involves subtracting any recoveries the lender made from the outstanding principal and interest.
If your business defaults on an SBA loan, the SBA will calculate its loss based on the outstanding balance, interest, and any liquidation expenses, less any proceeds from selling collateral. As the buyer, your primary concern is to avoid default by running a successful business, but understanding this shows how the SBA protects lenders.
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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