{"ok":true,"canonical_url":"https://dealroom.so/glossary/collateral-perfection","api_url":"https://dealroom.so/api/public/glossary/collateral-perfection","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-perfection","term":"Collateral perfection","group":"Doing the deal","definition":"This is the legal process lenders use to protect their security interest in collateral against claims from other creditors. It formally establishes the lender's priority.","what_it_means":"Your lender will \"perfect\" its lien on the business assets by filing a UCC financing statement with the appropriate state authorities. This makes their claim public and establishes their priority position, typically a first lien, against other creditors. Ensure your attorney verifies proper perfection to secure your lender's interest and the loan proceeds.","url":"https://dealroom.so/glossary/collateral-perfection","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":"lien","term":"Lien","url":"https://dealroom.so/glossary/lien"},{"slug":"ucc-filing","term":"UCC filing","url":"https://dealroom.so/glossary/ucc-filing"},{"slug":"security-interest","term":"Security Interest","url":"https://dealroom.so/glossary/security-interest"},{"slug":"first-lien","term":"First lien","url":"https://dealroom.so/glossary/first-lien"}],"related_questions":[{"question":"Can a 7(a) lender release a portion of the collateral without prior SBA approval if the remaining collateral is sufficient?","url":"https://dealroom.so/for-lenders/questions/can-a-7-a-lender-release-a-portion-of-the-collateral-without-prior-sba-approval-if-the-rem"},{"question":"When can a 7(a) lender release a portion of the collateral without prior SBA approval if the remaining collateral is sufficient?","url":"https://dealroom.so/for-lenders/questions/when-can-a-7-a-lender-release-a-portion-of-the-collateral-without-prior-sba-approval-if-th"},{"question":"Can cash in the business bank account count as collateral?","url":"https://dealroom.so/sba-loans/basics/can-cash-in-the-business-bank-account-count-as-collateral"},{"question":"What happens if my business does not have enough collateral?","url":"https://dealroom.so/sba-loans/basics/what-happens-if-my-business-does-not-have-enough-collateral"},{"question":"Can my business's accounts receivable be used as collateral?","url":"https://dealroom.so/sba-loans/basics/can-my-business-s-accounts-receivable-be-used-as-collateral"},{"question":"Is collateral always required for an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/is-collateral-always-required-for-an-sba-7-a-loan"}]},"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 perfection","url":"https://dealroom.so/glossary/collateral-perfection","source_type":"DealRoom Data"}}