Glossary · Doing the deal
Liquidate
In short
To liquidate means to sell off assets to convert them into cash, often to pay off debts. Buyers care because in a worst-case scenario, if the business fails, collateral assets would be liquidated to repay your SBA loan.
What it means in a deal
The SBA and your lender will assess the liquidation value of collateral pledged for your loan. While you're focused on success, understanding the lender's recourse in a default scenario is crucial. A liquidation plan is prepared if a loan defaults, outlining how assets will be sold to recover funds.
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 Liquidate
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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