Glossary · The loan itself
100% collateralization
In short
This means the total value of assets pledged as collateral equals or exceeds the loan amount. The SBA requires this whenever possible.
What it means in a deal
The SBA requires lenders to secure loans with available collateral to the maximum extent possible, up to the loan amount. This doesn't mean you need to find outside collateral if the business assets are insufficient, but the lender must take all available business and personal assets. Don't confuse this with the SBA guaranty.
Official sources
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about 100% collateralization
- Does a partner buyout require 100% ownership by the acquiring individual?
- When acquiring a business, can an SBA loan finance 100% of the goodwill value?
- Can an SBA 7(a) loan finance 100% of an existing partner's share buyout?
- Can I use an SBA 7(a) loan to purchase a majority but not 100% of a business?
- Can an SBA 7(a) loan be used to purchase a majority stake in a business, not 100%?
- Can an SBA 7(a) loan be used to purchase a majority but not 100% of a business?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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