Glossary · Reading the business
Collateral Appraisal
In short
An independent valuation of the assets pledged as collateral for your loan, determining their fair market value. This ensures the lender knows the recovery value in case of default.
What it means in a deal
For your SBA 7(a) loan, especially if there's significant real estate or equipment pledged, a collateral appraisal will be required. The appraisal's valuation impacts the lender's collateral analysis and can influence loan terms or additional collateral requirements. Ensure you understand its findings.
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 Collateral Appraisal
- Can a lender accept a "soft offer" for collateral in liquidation, or is a formal appraisal always required for disposition?
- What are the SBA's requirements for obtaining an independent appraisal of non-real estate business collateral for a 7(a) loan?
- Is an independent appraisal always required when an acquisition includes significant goodwill?
- When is an independent appraisal required for non-real estate business assets being acquired?
- Does the SBA require an independent business appraisal for a business acquisition costing $400,000?
- Can an SBA 7(a) loan cover the cost of a business valuation or appraisal?
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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