Glossary · The loan itself
Loss exposure
In short
The potential financial risk or maximum amount of loss a lender faces if a borrower defaults. The SBA evaluates this for every loan.
What it means in a deal
The SBA assesses the lender's loss exposure when guaranteeing a loan. For buyers, this primarily relates to collateral and personal guarantees. A higher loss exposure for the lender might lead to stricter collateral requirements or a stronger personal guarantee from you.
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 Loss exposure
- What steps must a lender take to mitigate loss during loan liquidation before submitting a Universal Purchase Package (UPP)?
- What are the specific requirements for naming the lender as the loss payee on a life insurance policy collateral assignment?
- What specific steps must a lender take to mitigate loss during loan liquidation before submitting a Universal Purchase Package (UPP)?
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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