Glossary · Doing the deal
Net recovery
In short
The amount of money a lender ultimately recoups from a defaulted loan after deducting all costs associated with liquidation and collection.
What it means in a deal
If an SBA loan defaults, the lender will try to recover as much as possible from collateral and guarantors. Net recovery is what they actually get after paying for things like legal fees, appraisal costs, and auction expenses. The SBA guaranty covers a percentage of this net loss to the lender, not the gross loan amount.
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 Net recovery
- How does a lender comply with SBA requirements for maximizing recovery on collateral during liquidation?
- What minimum efforts must a lender demonstrate in collection and recovery before submitting a liquidation plan to the SBA?
- What is the specific personal net worth threshold that triggers a personal guaranty requirement for an owner?
- Can I use an SBA 7(a) loan to purchase a business with a negative net worth?
- Can an SBA 7(a) loan be used to purchase a business with a negative net worth?
- Can an SBA 7(a) loan be used to purchase a business with a negative tangible net worth?
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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