{"ok":true,"canonical_url":"https://dealroom.so/glossary/collection-effort","api_url":"https://dealroom.so/api/public/glossary/collection-effort","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":"collection-effort","term":"Collection effort","group":"Doing the deal","definition":"A collection effort refers to the actions a lender takes to recover money owed on a defaulted loan, including contacting the borrower, pursuing collateral, and enforcing personal guarantees.","what_it_means":"If you default on your SBA loan, the lender will initiate collection efforts. This involves demanding payment, liquidating business assets used as collateral, and pursuing your personal guarantee. Understanding this process underscores why you must manage your business's cash flow carefully and communicate with your lender if you face financial difficulties.","url":"https://dealroom.so/glossary/collection-effort","official_sources":[{"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"},{"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":"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":"liquidation","term":"Liquidation","url":"https://dealroom.so/glossary/liquidation"},{"slug":"recourse","term":"Recourse","url":"https://dealroom.so/glossary/recourse"}],"related_questions":[{"question":"What minimum collection efforts must a lender demonstrate before submitting a 7(a) liquidation plan?","url":"https://dealroom.so/for-lenders/questions/what-minimum-collection-efforts-must-a-lender-demonstrate-before-submitting-a-7-a-liquidat"},{"question":"What minimum efforts must a lender demonstrate in collection and recovery before submitting a liquidation plan to the SBA?","url":"https://dealroom.so/for-lenders/questions/what-minimum-efforts-must-a-lender-demonstrate-in-collection-and-recovery-before-submittin"},{"question":"What if my personal credit report shows a minor collection from several years ago?","url":"https://dealroom.so/sba-7a/questions/what-if-my-personal-credit-report-shows-a-minor-collection-from-several-years-ago"},{"question":"Can I use personal assets like a valuable coin collection or art as part of my equity injection?","url":"https://dealroom.so/sba-7a/questions/can-i-use-personal-assets-like-a-valuable-coin-collection-or-art-as-part-of-my-equity-inje"},{"question":"What constitutes diligent liquidation efforts a lender must demonstrate before submitting a guaranty purchase request?","url":"https://dealroom.so/for-lenders/questions/what-constitutes-diligent-liquidation-efforts-a-lender-must-demonstrate-before-submitting-"},{"question":"What constitutes \"commercially reasonable\" efforts by a lender in liquidating collateral for a defaulted 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/what-constitutes-commercially-reasonable-efforts-by-a-lender-in-liquidating-collateral-for"}]},"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 — Collection effort","url":"https://dealroom.so/glossary/collection-effort","source_type":"DealRoom Data"}}