Glossary · The loan itself
Haircut
In short
When a lender values collateral at less than its face value or market price. This protects the lender against potential losses if they have to seize and sell the asset.
What it means in a deal
For SBA loans, lenders apply haircuts to various assets like accounts receivable or inventory when determining collateral value. Understand how your lender values assets to see if you have a collateral shortfall, which means you'll need more equity or other collateral.
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
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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