Glossary · Reading the business
Recoverability
In short
This refers to the likelihood that a lender can recoup its investment from a defaulted loan, usually by seizing and selling collateral. It's a key factor in underwriting.
What it means in a deal
Lenders assess the recoverability of their loan by evaluating the liquidation value of pledged collateral and the strength of personal guarantees. For your 7(a) loan, the lender will perform a collateral analysis to determine what assets could be sold to cover losses, impacting loan terms and collateral requirements.
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
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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