Glossary · Doing the deal
Pledge Agreement
In short
This is the legal document that formalizes the pledging of assets as collateral for a loan. It details the specific property being offered as security.
What it means in a deal
Your lender will require you to sign a pledge agreement, also known as a security agreement, listing all business assets and potentially personal assets that serve as collateral for the SBA loan. This document gives the lender a security interest and the right to perfect a lien via a UCC filing. Review it carefully to know exactly what assets are encumbered.
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 Pledge Agreement
- Do I always need to pledge collateral for an SBA 7(a) loan?
- If the business's assets are insufficient, will I need to pledge personal assets as collateral?
- Do I need to pledge personal collateral, like my home, for an SBA 7(a) loan?
- If the business assets are not enough, will the SBA require me to pledge my primary residence as collateral for a $700,000 loan?
- How does life insurance effectively fund a business buy-sell agreement?
- How does the purchase agreement structure affect an SBA partner buyout?
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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