This fee helps the US government manage and fund the SBA programs and helps defray the cost of losses that occur when borrowers default on loans when their business fails.
Read: Understanding the SBA Guaranty Fee
What’s the difference between guarantee and guaranty?
ANSWER: Guarantee, the broader and more common term, is both a verb and a noun. The narrower term, guaranty, today appears mostly in banking and other financial contexts; it seldom appears in nonlegal writing.