{"ok":true,"canonical_url":"https://dealroom.so/glossary/collateral-substitution","api_url":"https://dealroom.so/api/public/glossary/collateral-substitution","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-substitution","term":"Collateral Substitution","group":"The loan itself","definition":"When a borrower wants to swap out one piece of collateral securing their SBA loan for another. This happens after the loan closes and requires SBA approval.","what_it_means":"If you need to sell an asset that was pledged as collateral, like real estate, you'll need to offer a suitable replacement. The SBA needs to ensure the new collateral provides equivalent security for the loan. Work with your lender to submit the request and valuation of the proposed new collateral to the SBA for approval.","url":"https://dealroom.so/glossary/collateral-substitution","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"},{"slug":"13-cfr-part-120","title":"13 CFR Part 120 — Business Loans","official_url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120","official_label":"View on eCFR","authority_tier":1,"publisher":"Office of the Federal Register","source_guide_url":"https://dealroom.so/sba-7a/sources/13-cfr-part-120"}],"related":[{"slug":"collateral","term":"Collateral","url":"https://dealroom.so/glossary/collateral"},{"slug":"collateral-analysis","term":"Collateral analysis","url":"https://dealroom.so/glossary/collateral-analysis"},{"slug":"ucc-lien","term":"UCC lien","url":"https://dealroom.so/glossary/ucc-lien"},{"slug":"lien","term":"Lien","url":"https://dealroom.so/glossary/lien"}],"related_questions":[{"question":"Can a 7(a) lender approve the substitution of significant collateral without prior SBA approval?","url":"https://dealroom.so/for-lenders/questions/can-a-7-a-lender-approve-the-substitution-of-significant-collateral-without-prior-sba-appr"},{"question":"Can a lender approve a collateral substitution without prior SBA approval during 7(a) loan servicing?","url":"https://dealroom.so/for-lenders/questions/can-a-lender-approve-a-collateral-substitution-without-prior-sba-approval-during-7-a-loan-"},{"question":"When does a lender require prior SBA approval for a voluntary collateral substitution on a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/when-does-a-lender-require-prior-sba-approval-for-a-voluntary-collateral-substitution-on-a"},{"question":"What specific types of collateral substitutions can a lender approve without prior SBA consent on a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/what-specific-types-of-collateral-substitutions-can-a-lender-approve-without-prior-sba-con"},{"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"}]},"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 Substitution","url":"https://dealroom.so/glossary/collateral-substitution","source_type":"DealRoom Data"}}