Glossary · Doing the deal
Collateral Release
In short
This is the formal process of removing a lender's security interest (lien) from a specific asset or assets that were pledged as collateral. It frees up the asset from the loan obligation.
What it means in a deal
When you sell an asset that was part of your SBA 7(a) loan collateral, you'll need a Collateral Release from your lender and the SBA. This is a critical step to ensure the asset can be transferred free and clear to a new owner. The proceeds from the sale often go towards reducing your Outstanding Balance.
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 Release
- Can a 7(a) lender release a portion of the collateral without prior SBA approval if the remaining collateral is sufficient?
- When can a lender release collateral on a 7(a) loan without obtaining prior SBA approval?
- Can a lender release a personal guarantor without SBA approval if collateral fully covers the loan?
- When can a 7(a) lender release a portion of the collateral without prior SBA approval if the remaining collateral is sufficient?
- What are the specific requirements for a lender to release collateral on a 7(a) loan during its term?
- Which specific types of collateral can a lender release without prior SBA approval during the servicing phase of a 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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