Glossary · Doing the deal
Foreclosure
In short
The legal process by which a lender repossesses and sells property (like real estate or business assets) when a borrower defaults on their loan.
What it means in a deal
If you default on your SBA loan, the lender can initiate foreclosure proceedings on any real estate or other assets pledged as collateral. This is the ultimate recourse for the lender to recover losses, so understand what assets you're putting on the line. Review your personal guarantee carefully.
Related terms
Common questions about Foreclosure
- Does having a past personal foreclosure affect my eligibility for an SBA 7(a) loan?
- How does a recent personal foreclosure or short sale on my home affect SBA 7(a) loan approval?
- Does a foreclosure on an investment property (not my primary residence) affect my SBA 7(a) loan approval chances?
- Can prior bankruptcies or foreclosures impact my SBA 7(a) loan eligibility?
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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