Glossary · Doing the deal
Collateral Assignee
In short
A party, typically the SBA lender, to whom certain rights or assets are assigned as collateral for a loan. This protects the lender's interest.
What it means in a deal
In an SBA loan context, your lender will often be named as a collateral assignee on key insurance policies, like life insurance for key principals or property insurance. This means if a claim is paid, the funds go to the lender first to protect their interest in the loan. This is common for "key man" life insurance, ensuring the loan can be repaid if a key person passes away.
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 Collateral Assignee
- Can a 7(a) lender release a portion of the collateral without prior SBA approval if the remaining collateral is sufficient?
- When can a 7(a) lender release a portion of the collateral without prior SBA approval if the remaining collateral is sufficient?
- Can cash in the business bank account count as collateral?
- What happens if my business does not have enough collateral?
- Can my business's accounts receivable be used as collateral?
- Is collateral always required for an SBA 7(a) loan?
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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