Glossary · Doing the deal
Debt Collection
In short
The process a lender undertakes to recover money owed on a defaulted loan. This can involve demanding payment, repossessing collateral, or legal action.
What it means in a deal
If your SBA loan defaults, the lender will initiate Debt Collection efforts, which can include demanding payment from you as the borrower and any guarantors, seizing and selling pledged Collateral, and pursuing legal judgments. This is part of the lender's overall Liquidation process.
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 Debt Collection
- What if my personal credit report shows a minor collection from several years ago?
- What minimum collection efforts must a lender demonstrate before submitting a 7(a) liquidation plan?
- Can I use personal assets like a valuable coin collection or art as part of my equity injection?
- What minimum efforts must a lender demonstrate in collection and recovery before submitting a liquidation plan to the SBA?
- How is prior owner debt converted to equity treated for injection purposes?
- Can I use an SBA 7(a) loan to refinance existing business debt?
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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