Glossary · The loan itself
Collateral requirement
In short
This refers to the assets the lender requires you to pledge as security for the loan. If you default, the lender can seize and sell these assets.
What it means in a deal
The SBA requires lenders to take all available business and personal collateral up to the loan amount. This often includes accounts receivable, inventory, equipment, and potentially a lien on your personal residence. Understand what assets are pledged and their liquidation value.
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 requirement
- Is the collateral requirement less strict for smaller SBA 7(a) loan amounts?
- What is the SBA's general requirement for lien position on business collateral?
- What is the requirement for a lender to ensure proper maintenance of life insurance collateral on key principals?
- Can a term life insurance policy be used for the collateral assignment requirement on an SBA 7(a) loan?
- Is "insurable interest" always a legal requirement for obtaining business life insurance?
- Is profitability a strict requirement for getting 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.
See which SBA lenders would fund your deal
Tell us the business, the price, and where you are — we'll point you to the lenders most likely to approve a 7(a) like yours and flag what trips up approval.
Free · No documents · Usually same-day
Backed by data on 1,000+ SBA lenders and 300,000+ funded deals. Your details go only to lending partners you ask to be matched with — never sold to advertisers.