{"ok":true,"canonical_url":"https://dealroom.so/glossary/collateral-value","api_url":"https://dealroom.so/api/public/glossary/collateral-value","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-value","term":"Collateral Value","group":"Reading the business","definition":"This is the appraised worth of assets pledged to secure a loan. While the SBA 7(a) loan is primarily cash-flow based, lenders still assess collateral to mitigate risk in case of Default.","what_it_means":"The lender will conduct a Collateral Analysis to determine the liquidation value of the business assets, including accounts receivable, inventory, and equipment. If there's a Collateral Shortfall, the SBA may require additional assets, like a lien on your personal residence (if unencumbered), to meet their policy requirements. Your equity injection also reduces the loan-to-value ratio.","url":"https://dealroom.so/glossary/collateral-value","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-analysis","term":"Collateral analysis","url":"https://dealroom.so/glossary/collateral-analysis"},{"slug":"collateral-shortfall","term":"Collateral shortfall","url":"https://dealroom.so/glossary/collateral-shortfall"},{"slug":"liquidation-value","term":"Liquidation Value","url":"https://dealroom.so/glossary/liquidation-value"}],"related_questions":[{"question":"How does a lender determine the fair market value of business equipment used as collateral?","url":"https://dealroom.so/sba-7a/questions/how-does-a-lender-determine-the-fair-market-value-of-business-equipment-used-as-collateral"},{"question":"How does the SBA typically value intangible assets like customer lists or software for collateral?","url":"https://dealroom.so/sba-7a/questions/how-does-the-sba-typically-value-intangible-assets-like-customer-lists-or-software-for-col"},{"question":"How does a lender evaluate the market value of collateral when there are limited comparable sales?","url":"https://dealroom.so/sba-7a/questions/how-does-a-lender-evaluate-the-market-value-of-collateral-when-there-are-limited-comparabl"},{"question":"What happens if the appraised value of the collateral declines significantly after the loan is disbursed?","url":"https://dealroom.so/sba-7a/questions/what-happens-if-the-appraised-value-of-the-collateral-declines-significantly-after-the-loa"},{"question":"Can the value of my owner-occupied commercial real estate serve as collateral for an acquisition loan?","url":"https://dealroom.so/sba-7a/questions/can-the-value-of-my-owner-occupied-commercial-real-estate-serve-as-collateral-for-an-acqui"},{"question":"Can the value of customer contracts or recurring revenue streams count as collateral for an SBA loan?","url":"https://dealroom.so/sba-7a/questions/can-the-value-of-customer-contracts-or-recurring-revenue-streams-count-as-collateral-for-a"}]},"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 Value","url":"https://dealroom.so/glossary/collateral-value","source_type":"DealRoom Data"}}