Glossary · The loan itself
Collateral policy
In short
This is the set of rules and guidelines the SBA and lenders follow regarding what assets can secure a loan and how they are valued. It dictates what collateral is required for your 7(a) loan.
What it means in a deal
The SBA requires all available business and personal assets to be pledged as collateral up to the loan amount. Lenders must conduct a collateral analysis and ensure their lien position is perfected. Understand that
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 policy
- What is the specific SBA policy document that addresses collateral life insurance requirements?
- What is the SBA's policy on collateral requirements if business assets are insufficient?
- How is a life insurance policy assigned as collateral to a lender for a business loan?
- Can a term life insurance policy be used for the collateral assignment requirement on an SBA 7(a) loan?
- Are there specific requirements for the type of life insurance policy needed for a collateral assignment on a key principal?
- What are the specific requirements for naming the lender as the loss payee on a life insurance policy collateral assignment?
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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