Glossary · Doing the deal
Security Agreements
In short
Legal contracts that grant the lender a security interest in specific assets of the business, which act as collateral for the loan. These protect the lender's investment.
What it means in a deal
Your SBA lender will require security agreements covering all business assets, including accounts receivable, inventory, equipment, and general intangibles. These agreements formally establish the lender's right to seize those assets if you default. Ensure you understand what assets are pledged and how the security interest is perfected, typically through UCC filings.
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 Security Agreements
- What specific conditions trigger affiliation due to contractual relationships or franchise agreements?
- What are the key distinctions between cross-purchase and entity-purchase buy-sell agreements?
- How does the SBA review franchise agreements for compliance if there are unusual clauses regarding termination or transfer?
- How does the SBA determine if a franchisor has "control" over a franchisee for affiliation purposes, beyond standard agreements?
- How does the SBA require lenders to perfect security interests on accounts receivable and inventory?
- How does a lender perfect a security interest in intellectual property for a 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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