Glossary · Doing the deal
Personal Collateral
In short
This refers to personal assets, such as your home or investment accounts, that you pledge to secure the SBA loan. It provides the lender with additional security beyond the business assets.
What it means in a deal
If the business assets don't fully cover the loan amount (a collateral shortfall), the lender will require personal collateral from all guarantors. This most commonly involves a second mortgage on your primary residence. Understand that this puts your personal assets at risk if the business defaults.
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 Personal Collateral
- When is personal real estate typically required as additional collateral?
- Is personal collateral always required for an SBA 7(a) loan?
- What specific collateral must be taken when a 7(a) loan is under-collateralized by business assets, even with a blanket lien?
- Does the SBA take a lien on my personal home as collateral?
- Is a personal guarantee required even if my business has lots of collateral?
- Can a lien on my personal vehicle or other personal property be required as collateral for an SBA 7(a) loan?
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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