{"ok":true,"canonical_url":"https://dealroom.so/glossary/collateral-valuation","api_url":"https://dealroom.so/api/public/glossary/collateral-valuation","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-valuation","term":"Collateral valuation","group":"Reading the business","definition":"The process of determining the market value of assets pledged as security for a loan. This helps the lender assess their recovery potential if the loan defaults.","what_it_means":"For an SBA 7(a) loan, your lender will get an independent appraisal or valuation of any real estate, machinery, equipment, or other significant assets used as collateral. This valuation influences the loan amount and confirms there's sufficient security, even if a collateral shortfall exists.","url":"https://dealroom.so/glossary/collateral-valuation","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":"appraisal","term":"Appraisal","url":"https://dealroom.so/glossary/appraisal"},{"slug":"liquidation-value","term":"Liquidation Value","url":"https://dealroom.so/glossary/liquidation-value"}],"related_questions":[{"question":"How does the valuation of goodwill specifically impact the collateral requirements for an SBA 7(a) acquisition loan?","url":"https://dealroom.so/sba-7a/questions/how-does-the-valuation-of-goodwill-specifically-impact-the-collateral-requirements-for-an-"},{"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":"When is an independent business valuation required for a partner buyout?","url":"https://dealroom.so/sba-7a/questions/when-is-an-independent-business-valuation-required-for-a-partner-buyout"},{"question":"What valuation methods are acceptable for assessing goodwill in an SBA acquisition?","url":"https://dealroom.so/sba-7a/questions/what-valuation-methods-are-acceptable-for-assessing-goodwill-in-an-sba-acquisition"},{"question":"What if the business valuation is insufficient to support the purchase price?","url":"https://dealroom.so/sba-7a/questions/what-if-the-business-valuation-is-insufficient-to-support-the-purchase-price"},{"question":"What is the importance of a professional business valuation for an acquisition?","url":"https://dealroom.so/sba-7a/questions/what-is-the-importance-of-a-professional-business-valuation-for-an-acquisition"}]},"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 valuation","url":"https://dealroom.so/glossary/collateral-valuation","source_type":"DealRoom Data"}}