Glossary · Doing the deal
Absolute Assignment
In short
This is a complete transfer of rights or ownership of an asset from one party to another. For SBA loans, it typically applies to life insurance policies.
What it means in a deal
If you, as a key principal, are required to have life insurance for the loan, the lender will likely require an absolute assignment of the policy. This means they become the owner and beneficiary, ensuring the loan is paid off if you die. You'll complete an Assignment of Policy form.
Official sources
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 Absolute Assignment
- What is the absolute maximum dollar amount available for an SBA 7(a) loan?
- What is the absolute highest amount an SBA 7(a) loan can be for?
- What is the absolute minimum cash injection required for an SBA 7(a) business acquisition?
- What is the absolute highest amount I can borrow with an SBA 7(a) loan?
- How does a collateral assignment of life insurance protect a lender?
- What is the difference between collateral assignment and naming a lender beneficiary?
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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