Glossary · Doing the deal
Assignment
In short
This is a legal transfer of rights or property from one party to another. In an SBA deal, you might assign rights to an insurance policy or a contract to the lender.
What it means in a deal
You'll typically encounter assignments in two key areas. First, you'll assign a life insurance policy to the lender, making them the beneficiary up to the loan amount. Second, existing contracts or leases with the target business might need formal assignment to your new entity. Ensure all necessary assignments are properly executed at closing.
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 Assignment
- How does a collateral assignment of life insurance protect a lender?
- What is the difference between collateral assignment and naming a lender beneficiary?
- When does the SBA typically mandate collateral assignment of life insurance for a business loan?
- What are the specific requirements for life insurance collateral assignment when multiple key principals exist?
- How does a lender ensure proper collateral assignment of life insurance on multiple key principals?
- When is life insurance collateral assignment required for key principals in an acquisition, and for whom?
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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