Glossary · The loan itself
Primary recourse
In short
This refers to the main source a lender can pursue for repayment if the borrower defaults. For an SBA loan, this is the business itself and the guarantors.
What it means in a deal
The business's cash flow is the primary recourse for the lender. If that fails, they'll turn to the collateral pledged and then to the personal guarantees of all owners with 20% or more stake. Understand this chain of responsibility and your personal exposure before closing.
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 Primary recourse
- If the SBA issues a denial of the 7(a) guaranty, what recourse or action can the lender take?
- What is the primary purpose of SBA Form 1919 for eligibility?
- What is the primary purpose of the Universal Purchase Package (UPP)?
- What is the primary purpose of SBA Form 1919, 'Borrower Information Form'?
- What is the primary goal of the SBA 7(a) loan program?
- What are the primary fees charged on 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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