{"ok":true,"canonical_url":"https://dealroom.so/glossary/collateral-coverage","api_url":"https://dealroom.so/api/public/glossary/collateral-coverage","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"collateral-coverage","term":"Collateral Coverage","group":"Doing the deal","definition":"This is the extent to which the value of pledged assets covers the loan amount. Lenders want to see strong collateral coverage to minimize their risk if the business defaults.","what_it_means":"The SBA requires lenders to take all available collateral up to the loan amount. Lenders will perform a collateral analysis, valuing business assets like accounts receivable, inventory, and equipment. If these aren't enough, personal collateral will be required to achieve adequate coverage.","url":"https://dealroom.so/glossary/collateral-coverage","official_sources":[{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"}],"related":[{"slug":"collateral","term":"Collateral","url":"https://dealroom.so/glossary/collateral"},{"slug":"collateral-shortfall","term":"Collateral shortfall","url":"https://dealroom.so/glossary/collateral-shortfall"},{"slug":"personal-collateral","term":"Personal Collateral","url":"https://dealroom.so/glossary/personal-collateral"},{"slug":"collateral-analysis","term":"Collateral analysis","url":"https://dealroom.so/glossary/collateral-analysis"}],"related_questions":[{"question":"How does inadequate collateral coverage affect a lender's adherence to prudent lending standards?","url":"https://dealroom.so/for-lenders/questions/how-does-inadequate-collateral-coverage-affect-a-lender-s-adherence-to-prudent-lending-sta"},{"question":"Does the SBA require specific types of insurance coverage on collateral used for a 7(a) loan?","url":"https://dealroom.so/sba-7a/questions/does-the-sba-require-specific-types-of-insurance-coverage-on-collateral-used-for-a-7-a-loa"},{"question":"What if the borrower's total business assets do not provide full collateral coverage for the 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/what-if-the-borrower-s-total-business-assets-do-not-provide-full-collateral-coverage-for-t"},{"question":"How are appropriate business life insurance coverage amounts calculated?","url":"https://dealroom.so/sba-7a/questions/how-are-appropriate-business-life-insurance-coverage-amounts-calculated"},{"question":"What is the typical amount of key-person life insurance coverage needed?","url":"https://dealroom.so/sba-7a/questions/what-is-the-typical-amount-of-key-person-life-insurance-coverage-needed"},{"question":"How is the ideal coverage amount for key-person life insurance typically calculated?","url":"https://dealroom.so/sba-7a/questions/how-is-the-ideal-coverage-amount-for-key-person-life-insurance-typically-calculated"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Collateral Coverage","url":"https://dealroom.so/glossary/collateral-coverage","source_type":"DealRoom Data"}}