Glossary · The loan itself
In short
This is the legal right of the SBA, after paying a lender on a defaulted loan, to step into the lender's shoes and collect from the borrower or guarantors. It means you still owe the SBA directly.
If your 7(a) loan defaults and the SBA pays the lender's guaranty claim, the SBA then has the right of Subrogation. This means they will pursue collection directly from you, your personal guarantee, and any pledged collateral. Don't think defaulting means you're off the hook.
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