As a lender that works with the United States Small Business Administration (SBA), your SBA guaranty is the most important piece of collateral you have. The SBA provides a guaranty to mitigate risks for lenders so they can make credit more widely available to the small business owners who need it. While the SBA is willing to provide this guaranty to lenders, they won’t grant it without first conducting an extensive review of the loan in question. You’ll need to prepare an SBA guaranty purchase package for their review, which can be a complex task, especially if you’ve never undertaken it before. To maximize the likelihood of a guaranty purchase approval, you need the advice of a legal advisor for a guaranty purchase.
The attorneys at Starfield & Smith have extensive experience assisting lenders, including banks, credit unions, and non-bank entities with preparing and submitting SBA guaranty purchase packages. Those who have never applied for an SBA guaranty before may be unaware of the SBA’s rules. Even if you have submitted a guaranty purchase before, you may not be up to date on current requirements. We understand what information the SBA needs to approve your SBA guaranty, and can quickly identify areas of concern so that lenders can address them before submission. A lawyer from our firm will partner with you as a consultant to bring loan files up to SBA standards and increase your chances of approval and payment of your SBA guaranty.
To get legal advice on your guaranty purchase, call Starfield & Smith at (215) 542-7070. You can also seek counsel on our website by visiting our contact page and filling out the online form or by sending an email to info@starfieldsmith.com. You don’t have to navigate your guaranty purchase alone; get reliable legal advice today from a dedicated guaranty purchase attorney before you start the process.
In addition to being a trusted legal advisor for SBA guaranty purchase, we also provide SBA lender assistance with SBA creditor rights issues, obtaining SBA lender licenses, and more. An SBA compliance attorney can even perform focused SBA compliance reviews before a regulatory audit or help you get back into compliance after an audit. Failure to comply with SBA lending requirements can result in your guaranty amount being lowered or eliminated. You could even end up facing charges, so it’s best to get legal advice to make sure you meet the SBA’s stringent requirements for lenders.
Our regulatory compliance audits are a great tool to review your internal processes and identify any problems before they become a matter for the authorities. Not only can we advise you on the best lending practices for all current laws and regulations, but we can also conduct training sessions on-site or online to bring you and your staff up to speed on all the latest requirements. With regulatory compliance training, you’ll already know that you comply with your next audit even begins.
What's involved in preparing a guaranty purchase package?
Your guaranty purchase package (aka Universal Purchase Package) needs to demonstrate that you followed all SBA requirements from loan origination through default and liquidation. Legal advisers should review your complete loan file against current submission standards before you send anything to the National Guaranty Purchase Center.
They'll examine critical documentation including your loan authorization, terms and conditions, eligibility determination, underwriting, disbursement records, servicing history, and liquidation efforts. The SBA honors about 97% of its guaranties, but the remaining 3% often stems from preventable documentation errors. Experienced attorneys catch these issues during a pre-submission review when you can still fix them.
What documentation errors cause the most guaranty problems?
Based on SBA data and industry experience, eligibility deficiencies account for a significant portion of guaranty repairs and denials. For loans that default within the first 18 months, the SBA scrutinizes your initial underwriting with particular intensity.
The most common documentation gaps include:
- Missing or incomplete tax transcripts and personal financial statements for borrowers and guarantors
- Inadequate citizenship verification (especially after March 2025 requirements)
- Missing CAIVRS checks
- Insufficient environmental review documentation
- Gaps in the loan disbursement paper trail
- Lapsed hazard insurance on collateral that suffers a loss
- Improper lien perfection or subordination without business justification
Legal advisers conduct file audits using the same evaluation criteria SBA examiners apply. An incomplete eligibility determination discovered during internal review can be remediated prior to submission. The same issue found by SBA during purchase review can result in complete guaranty denial.
How do attorneys help me avoid guaranty repairs?
A repair reduces your guaranty payment, functioning as a penalty when the SBA determines there was a material deficiency in your administration of the loan during the loan lifecycle. Default purchase balances increased 12.3% from $588 million in FY2016 to over $660 million in FY2017, making repair avoidance increasingly important.
Attorneys help you implement controls that prevent common repair triggers:
- Pre-funding audits: Verify all closing documents meet SBA requirements before disbursement
- Servicing protocols: Ensure liens stay current and insurance certificates get renewed timely
- Disbursement tracking: Document every use of proceeds with supporting invoices and receipts
- Collateral management: Maintain proper lien positions throughout the loan term
They also train your staff on specific SBA requirements that differ from conventional lending standards. Many repairs occur because lenders apply their standard commercial practices to SBA loans without realizing the programs have significantly different rules.
What happens after I submit my guaranty purchase request?
The National Guaranty Purchase Center reviews your submission to verify compliance with loan authorization, SBA requirements, and prudent lending practices.
| Review Stage | Timeline | Lender Action Required |
|---|---|---|
| Initial receipt | 1-3 business days | Confirm submission received |
| Document review | 30-90 days | Respond to information requests |
| Additional info requests | 10-30 days per request | Provide complete documentation |
| Final determination | 15-45 days after completion | Accept payment or address concerns |
If SBA identifies concerns, they'll issue requests for additional documentation. These requests require prompt, complete responses. Missing a response deadline extends the review process and increases denial risk.
Can legal counsel help if SBA denies my guaranty?
Yes. A denial means the SBA determined your actions were severe enough to negate the guaranty entirely. However, denials aren't always final.
Attorneys can help you through these steps:
- Review the denial letter to identify the specific basis for SBA's decision
- Assess appeal options based on whether the denial has merit or can be challenged
- Develop remediation strategies if the denial stems from correctable issues
- Negotiate with SBA to potentially convert the denial into a repair instead
In some cases, attorneys can demonstrate that what SBA characterized as a serious violation was actually a minor oversight that doesn't warrant full guaranty denial. They can also provide other strategies to remedy the identified deficiency, if possible. Their experience negotiating with the National Guaranty Purchase Center proves invaluable during these discussions.
SBA Guaranty Attorney
If you need comprehensive counsel through your SBA guaranty purchase review, call Starfield & Smith. A lawyer from our firm can carefully assist you with each step of the SBA guaranty purchase process to rectify errors and ensure compliance. Our attorneys will assist you through:
- Preparing SBA Guaranty purchase package submissions to the SBA
- Resolving identified issues in the loan file before submission of the SBA guaranty purchase package
- Working with the SBA to solve problems with your SBA guaranty purchase
- Submitting the CPC tabs and the Wrap Up report to the SBA
Many times, lenders identify problems with their loans during the SBA guaranty purchase review process. While some SBA guaranty issues may be minor, others may be very serious. In some cases, overlooking certain SBA guaranty purchase compliance requirements can even result in civil or criminal charges or regulatory enforcement actions. Unfortunately, it can sometimes be difficult to identify a solution and lenders may be unable to resolve problems with their SBA guaranty purchase package on their own. If you don’t want to fall under the scrutiny of the Office of Credit Risk Management, the SBA’s Office of Inspector General, or the Department of Justice, it’s critical that you hire a legal advisor for SBA guaranty purchases before you submit your SBA guaranty package. Get in touch with us to speak to a lawyer who is well-versed in SBA loans and compliance and can identify and resolve issues with your SBA guaranty purchase package whenever possible.
Of course, Starfield & Smith can do more for you than just provide a legal advisor for SBA guaranty purchases; we provide many other services related to small business lending including:
- SBA Compliance Audits and Reviews
- SBA Creditors Rights
- SBA Liquidation
- SBA Lender Training for Clients
- SBA Loan Documentation and Closing
- SBA Non-Bank Licensing
- SBA Regulatory Compliance and Lender Oversight
- Business Litigation
- Title Services
- Starfield & Smith Express – a focused compliance review designed to be completed in a timely fashion and at a lower price point than our full-service SBA compliance audit
We’ve spent over 25 years working with small business lenders to ensure they comply with all state and federal regulations so they can continue their important work of providing the capital American small businesses need to stay in operation. We have worked with clients all over the country and we will be happy to match you with the best local SBA guaranty lawyer no matter where you’re located.
SBA Loan Approval Advisors
SBA guaranty purchase reviews and assembly of the SBA guaranty purchase package can be challenging. Any errors made in your SBA guaranty purchase package can end up costing you, and it’s easy to make mistakes without a legal advisor for SBA guaranty purchases. If you’re facing a guaranty purchase review, schedule a consultation with an attorney from our firm.
Starfield & Smith has already served as a legal advisor for SBA guaranty purchases for several clients throughout the country. We helped them successfully navigate complicated guaranty purchase issues, and now we’d like to help you. An attorney from our firm can advise you on how to strategically mitigate your risk and help you bring your loans up to SBA compliance guidelines. Call (215) 542-7070 to speak to a legal advisor for SBA guaranty purchases You can also reach us online by sending an email to info@starfieldsmith.com or by visiting our contact page and filling out the simple online form.
An SBA guaranty purchase is nothing to be taken lightly, so be sure to obtain a legal advisor for an SBA or an attorney for SBA lenders before you start preparing your SBA guaranty purchase package.