SBA 7(a) Q&A
Short answer
Significant negative findings during due diligence, such as undisclosed liabilities, a sharp decline in business performance, or misrepresentations by the seller, can cause an SBA 7(a) loan approval to be withdrawn.
Loan approvals are often conditional, pending the satisfactory completion of due diligence. If new information emerges that materially alters the risk profile of the business or the borrower, the lender (and by extension, the SBA) can withdraw the commitment.
A loan is conditionally approved based on three years of strong financial statements. During due diligence, it's discovered that the business lost a major customer representing 40% of its revenue last month, significantly impairing its cash flow projections. The loan approval would likely be withdrawn.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
7(a) Loan Program — Terms, Conditions, and Eligibility
U.S. Small Business Administration · Official SBA source
SOP 50 10 - Lender and Development Company Loan Programs
Last checked 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
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