Glossary · The loan itself
Collateral Description
In short
This is the detailed listing of assets pledged as security for your SBA loan. It specifies exactly what the lender can seize if you default.
What it means in a deal
The collateral description is a crucial part of your loan agreement and security instruments. It must be precise enough to identify the assets, which typically include all business assets (accounts receivable, inventory, equipment, general intangibles) and often personal real estate if there's a collateral shortfall. Your lender will file a UCC lien based on this description. Ensure you understand what specific assets are encumbered by the loan, both business and personal.
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 Description
- 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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