{"ok":true,"canonical_url":"https://dealroom.so/glossary/collateral-liquidation","api_url":"https://dealroom.so/api/public/glossary/collateral-liquidation","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-liquidation","term":"Collateral liquidation","group":"Doing the deal","definition":"The process of selling off assets pledged as collateral to recover funds for a defaulted loan. It's the lender's final step if your business defaults on its SBA loan.","what_it_means":"If your business loan defaults, the lender will pursue collateral liquidation to recoup their losses. This involves selling any pledged assets, including business assets and potentially your personal assets if you provided a Personal Guarantee. Understand the liquidation value of your collateral.","url":"https://dealroom.so/glossary/collateral-liquidation","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":"loan-default","term":"Loan default","url":"https://dealroom.so/glossary/loan-default"},{"slug":"personal-guarantee","term":"Personal guarantee","url":"https://dealroom.so/glossary/personal-guarantee"},{"slug":"servicing-and-liquidation","term":"Servicing and liquidation","url":"https://dealroom.so/glossary/servicing-and-liquidation"}],"related_questions":[{"question":"How does a lender comply with SBA requirements for maximizing recovery on collateral during liquidation?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-comply-with-sba-requirements-for-maximizing-recovery-on-collateral-durin"},{"question":"What is the specific lender's responsibility regarding environmental due diligence during the liquidation of real estate collateral?","url":"https://dealroom.so/for-lenders/questions/what-is-the-specific-lender-s-responsibility-regarding-environmental-due-diligence-during-"},{"question":"What specific documentation is required for a lender to prove 'commercially reasonable' disposition of collateral during 7(a) loan liquidation?","url":"https://dealroom.so/for-lenders/questions/what-specific-documentation-is-required-for-a-lender-to-prove-commercially-reasonable-disp"},{"question":"Can a lender accept a \"soft offer\" for collateral in liquidation, or is a formal appraisal always required for disposition?","url":"https://dealroom.so/for-lenders/questions/can-a-lender-accept-a-soft-offer-for-collateral-in-liquidation-or-is-a-formal-appraisal-al"},{"question":"What are the SBA's expectations for a lender's collateral valuation during the liquidation process of a defaulted 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/what-are-the-sba-s-expectations-for-a-lender-s-collateral-valuation-during-the-liquidation"},{"question":"What is the required timeframe for a lender to submit a liquidation plan?","url":"https://dealroom.so/for-lenders/questions/what-is-the-required-timeframe-for-a-lender-to-submit-a-liquidation-plan"}]},"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 liquidation","url":"https://dealroom.so/glossary/collateral-liquidation","source_type":"DealRoom Data"}}