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Can the SBFDC reduce the amount of a guarantee, or refuse payment of a claim made upon the guarantee?

April 26, 2017claim guarantee payment reduce refuse sbfdc

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Can the SBFDC reduce the amount of a guarantee, or refuse payment of a claim made upon the guarantee?

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Yes, there are three circumstances under which the SBFDC or any of its counterparts may reduce, or refuse payment under a guarantee. The SBFDC may refuse to honor a guarantee if the Bank was fraudulent in its application for a guarantee or if it can be proved the lender was grossly negligent in the manner in which it serviced the underlying credit.