SBA Guaranty Purchase Preparation: the purchase package in SBA's tab order, every tab read the way an SBA reviewer will
Purchase packages that pass first review, repairs caught while fixable.
See one case, screen by screen ↓It is what a lender sends SBA to ask it to honor its guaranty on a defaulted loan — to buy the guaranteed share. Under the Universal Purchase Package (UPP v3, effective 1 May 2025) it is eight tabs plus tabs for recoverable expenses, every document labelled and in SBA's order, with the Request to Honor signed by an officer of the bank.
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When an SBA loan defaults, the lender has to prove that origination, closing, servicing and liquidation were done by the rules — often years after the people who made the loan have moved on. The proof sits in a loan file of hundreds of documents spread across the origination system, the closing binder, the servicing system, email and the collections share.
Repairs and denials usually turn on the file, not the credit: an equity injection verified by a check copy, IRS transcripts never compared, a credit memo that does not match the final authorization, a collateral item nobody can account for, late fees left on the transcript of account. On an early default — within 18 months of disbursement — SBA re-reads the underwriting itself, and one weak tab can cost the whole guaranty.
Estimated split for one 7(a) early-default package, in working days, by hand and with the solution.
Six specialist agents file the loan file in SBA's order and score every tab like a purchase reviewer; the liquidation officer decides, an officer signs.
Hollis & Pike Bakery, an SBA 7(a) loan of $1,850,000 with a 75% guaranty, defaulted 15 months after disbursement. The bank wants the purchase request in by Tue 20 Oct — 8 days away. Here is what happens, screen by screen, in the working solution.
The loan moved to liquidation on 21 Aug 2026, and its loan file arrived Sun 11 Oct 22:40 — 318 documents and 2,140 pages from the origination system, the closing binder, the servicing system, the email archive and the collections share. The binder's tabs are empty, and the answer SBA is likely to give reads “Not read yet”.
“Six agents file every document behind its tab of the Universal Purchase Package, then read each tab the way SBA’s purchase reviewers do …”
Teresa presses Read it like SBA. The loan file reader files 69 exhibits behind 8 tabs; the timeline builder dates 27 events; the early default examiner applies the 18-month test under SOP 50 10 7.1 and finds the cause — Fairmarket Grocers, 38% of sales, ended its contract in November 2025. Each tab gets its exhibit count and a score as it is read.
Every step is shown as it runs, with what it found and how long it took.
Every tab now carries a risk score. Tab 4.3, Equity injection proof, scores 82: the closing checklist relied on Nathan Pike's source-of-funds statement, never signed, and a copy of his father's $60,000 check. Only $158,000 reached the business account — $48,800 short of the $206,800 required. The reviewer's likely words are written on the page in red ink.
“Likely repair: injection verified by unsigned statement” — $36,600 at stake, 75% of the $48,800 not proven.
Origination, closing, servicing, default and liquidation in five lanes, with the 18-month early-default window shaded from 14 Mar 2025 to 14 Sep 2026 and the default of 14 Jun 2026 inside it. Below, each event shows the document and page it was read from and the check made against it.
The timeline builder never fills a date it cannot cite.
Teresa opens the riskiest tab first and asks the agents to find the proof. They search the email archive and the closing agent's folder and find wire confirmation FED-0312-8871 of 12 Mar 2025 and Saltmarsh Title & Settlement's escrow ledger, which credited the $60,000 to the buyer at closing. $218,000 of $218,000 is traced before the 14 Mar disbursement, and the tab drops from 82 to 8.
A check copy alone never counts — only a cleared statement, a wire or an escrow ledger dated before disbursement.
The collateral list has 46 items; the post-default list has 45. The 2024 Ford Transit was sold on 9 Jan 2026 and the bank's lien was never noted on the Ohio title, so Tab 8 scores 71 — a likely repair. Teresa chooses a $21,000 voluntary repair, 75% of the $28,000 likely auction value, rather than argue it. It is above her $10,000 limit, so it goes to Malcolm with the package. The tab drops to 14.
The agents never offer a repair. A person chooses: a voluntary repair, or an explanation without one.
The authorization was modified on 7 Mar 2025 from $1,800,000 to $1,850,000 for a larger deck oven, but the credit memo still reads $1,800,000 and DSCR 1.38x. On an early default, SBA reads an unexplained mismatch as an underwriting failure. Teresa asks for the explanation: recomputed at $1,850,000, coverage is 1.35x — still above the 1.15x minimum.
“Possible denial: credit memo does not match the final authorization” — the full guaranty at stake if left unexplained.
The explanation is filed as exhibit 1-6 and Tab 1 drops from 58 to 9. Package items read 30 of 30, and the prediction at the top of the binder moves to “Pays as requested”: $1,145,539.24 after the $21,000 van repair offered up front, with no tab above 35.
Principal at the earliest uncured default, $1,718,201.06, less the deposit offset and the net equipment auction, gives $1,497,484.64. SBA's 75% share is $1,123,113.48, plus 75% of 120 days' interest at 10.25%, $43,425.76, less the $21,000 voluntary repair: a purchase request of $1,145,539.24. The Tab 2 loan summary is drafted from the timeline, for counsel to read.
Teresa marks the package ready and sends it to Malcolm, with a note on the $21,000 van repair. Malcolm signs the Request to Honor, and the package — 71 exhibits, 412 pages — goes to the National Guaranty Purchase Center in Herndon by secure file transfer, with E-Tran noted and a receipt on the case.
The agents never sign, submit or offer a repair on their own.
The same early default, seen by the four people who work it — in their own words, before and after.
Six specialist agents file the loan file in SBA's order and score every tab like a purchase reviewer; the liquidation officer decides, an officer signs.
Reads every document in the loan file — origination, closing binder, servicing, email and collections — identifies its type, date, parties and amounts, and files it behind its tab of SBA's Universal Purchase Package.
Dates every event in the loan's life — approval, modifications, closing, disbursement, payments, default, site visit, demand, recoveries — from the transcript, servicing notes and correspondence.
Applies the 18-month early-default test under the SOP in effect at approval, and finds the evidence of what caused the failure — customer loss, casualty, illness, market change.
Re-checks the approval the way an SBA reviewer will: equity injection traced to its source, IRS transcripts compared with the returns, credit memo against the final authorization, eligibility, SAM, CAIVRS and Form 1919.
Follows every collateral item from approval to its disposition and checks lien perfection, insurance, site-visit timing, demand on every obligor, recoveries, and the transcript against Form 1502.
Scores every tab against SBA's repair and denial reasons, predicts the first-review answer, computes the purchase amount, drafts the Tab 2 loan summary and the written explanations, and orders the exhibits in SBA's index.
Decides repairs and explanations; an officer signs. The agents propose; a named person decides.
Ask about the loan's life, any SBA requirement or the amount — or say what to draft. Every answer cites the document it rests on.
Is this an early default, and why did the business fail?
Yes. The loan was disbursed on 14 Mar 2025 and the earliest uncured default is the payment due 14 Jun 2026 — 15 months later, inside SBA's 18-month window, so SBA will re-read the underwriting. The cause is documented: Fairmarket Grocers, 38% of sales, ended its contract on 14 Nov 2025, and monthly sales fell from $201,400 to $124,900. The explanation is behind Tab 4.
Can we prove all $218,000 of the equity injection?
Yes, every dollar, before disbursement. SBA required $206,800. $158,000 moved from Nathan Pike's brokerage to the business account on 10 Mar 2025. The $60,000 gift from Raymond Pike never reached the business account — the credit file only had a check copy — but it was wired to the closing agent on 12 Mar and credited to the buyer on the escrow ledger.
How is the purchase amount worked out?
Principal at default $1,718,201.06, less recoveries $220,716.42; 75% of principal $1,123,113.48; 75% of 120 days' interest $43,425.76; less the $21,000 voluntary repair on the van: a purchase request of $1,145,539.24. The $1,214.37 of late fees are off the transcript, so it ties to Form 1502.
Draft the explanation for the credit memo gap
Drafted and filed behind Tab 1. The authorization went from $1,800,000 to $1,850,000 on 7 Mar 2025 for a larger oven, but the memo was never re-issued. Recomputed, coverage is 1.35x against 1.38x — above the 1.15x minimum — and the extra $50,000 went to the oven vendor. Tab 1 drops from 58 to 9.
13 screens from the working solution, on its sample data. Pick one to see it large.
The clocks, checks and approvers every purchase case is checked against are settings — versioned, and on the audit trail.
| Setting | Default | Choose from |
|---|---|---|
| SOP applied to underwriting and eligibility | By approval date (automatic) | SOP 50 10 5(K) · 50 10 7.1 · 50 10 8, by vintage |
| Early-default window | 18 months | Months from initial disbursement |
| Site visit after payment default | 60 days | Or within 15 days of a material adverse change |
| Purchase request target | 60 days | Bank policy, from transfer to liquidation |
| Interest claimed at purchase | Up to 120 days | At the rate on the earliest uncured default |
| Routine legal expense limit | $10,000 | Above it, SBA must approve a litigation plan and budget first |
| Voluntary repair by the liquidation officer | Up to $10,000 | Above it, the SVP decides |
| Request to Honor signed by | Malcolm Achebe | Signed by an officer of the bank |
Every figure is labelled: a target the solution is built to, an estimate, a typical published result, or a proven one.
“demo” = seen in the working solution, on its sample loan data · “target” = the design goal, measured in the live solution · “estimated” = our estimate · “typical” = published figures (SBA quality-control reviews Oct 2021–Mar 2025 and the Inspector General's challenge, Coleman Report, Sep 2026; SBA Universal Purchase Package v3, 1 May 2025; 13 CFR 120.520). People, banks, borrowers and loan numbers named on this page are fictional — characters and sample data in the working solution.
It is what a lender sends SBA to ask it to honor its guaranty on a defaulted loan — to buy the guaranteed share. Under the Universal Purchase Package (UPP v3, effective 1 May 2025) it is eight tabs plus tabs for recoverable expenses, every document labelled and in SBA's order, with the Request to Honor signed by an officer of the bank.
The purchase package writer scores every tab against SBA's usual repair and denial reasons — early default without a documented cause, equity injection not verified, IRS transcripts never compared, a credit memo that does not match the final authorization, proceeds not tied to payees, liens not perfected, a late site visit, fees on the transcript — and the evidence actually behind the tab. Scores of 65 and above are likely, 35–64 possible, 15–34 watch.
The early default examiner applies the 18-month test from initial disbursement under the SOP in effect at approval, then looks for the documented cause of failure. In the sample loan it found the termination letter from the borrower's largest customer and the drop in monthly sales, and the explanation was filed behind Tab 4.
Yes. The underwriting and eligibility verifier traces every dollar from its source to the business or the closing before disbursement. A check copy or an unsigned statement never counts as proof; when the proof is missing from the credit file, the agents search the email archive and the closing agent's folder for a wire, a cleared statement or an escrow ledger.
Principal at the earliest uncured default, less recoveries, times the guaranty percentage, plus up to 120 days of interest at the rate on the earliest uncured default, less any voluntary repair. Every line is tied to the transcript of account, and loan fees are removed so it reconciles to Form 1502.
Yes. The agents prepare the package and never sign, submit or offer a repair. The liquidation officer reviews every risk and explanation and may offer a repair up to $10,000; above that the SVP decides, and an officer of the bank signs the Request to Honor.
The working solution handles 7(a) loans — standard, PLP and SBA Express — and sends each package to the right center: the National Guaranty Purchase Center in Herndon, or the Fresno Commercial Loan Servicing Center. Underwriting is read against the SOP 50 10 of the approval date, and servicing and liquidation against SOP 50 57 4.
The Agentic Solution Engine builds and deploys it from your requirements and documents — your loan files, credit policy and purchase-package style — and it goes live once every quality gate has passed. We will run it on one of your own loans in liquidation first.
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