Glossary · Reading the business
Recoverable Value
In short
This is the estimated amount a lender could realistically get by selling the business's collateral if the loan defaults. It's a key part of how lenders assess risk.
What it means in a deal
When underwriting your 7(a) loan, the lender will analyze the recoverable value of the business's assets to see if they adequately secure the loan. If the recoverable value is low compared to the loan amount, it's a collateral shortfall, and you might need additional personal collateral.
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 Recoverable Value
- What if the primary business assets are specialized machinery with limited resale value?
- How does the SBA evaluate the value of contributed equipment for equity injection?
- What if the value of my stock portfolio (for equity injection) drops before closing?
- When acquiring a business, can an SBA loan finance 100% of the goodwill value?
- How does the SBA typically value goodwill in a business acquisition for lending purposes?
- How does a lender determine the fair market value of business equipment used as collateral?
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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