{"ok":true,"canonical_url":"https://dealroom.so/glossary/encumbered","api_url":"https://dealroom.so/api/public/glossary/encumbered","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":"encumbered","term":"Encumbered","group":"The loan itself","definition":"An asset is encumbered when it has a legal claim, like a lien, against it, meaning its ownership is restricted until the debt is satisfied. Lenders avoid encumbered collateral.","what_it_means":"For an SBA loan, the lender will take a first lien position on all business assets. Any assets already encumbered by existing debt or liens will need to be cleared before closing. Your lender will conduct lien searches to ensure the business's assets are \"unencumbered\" and available as collateral for your loan.","url":"https://dealroom.so/glossary/encumbered","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-lien","term":"UCC lien","url":"https://dealroom.so/glossary/ucc-lien"},{"slug":"collateral","term":"Collateral","url":"https://dealroom.so/glossary/collateral"},{"slug":"unencumbered","term":"Unencumbered","url":"https://dealroom.so/glossary/unencumbered"}],"related_questions":[]},"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 — Encumbered","url":"https://dealroom.so/glossary/encumbered","source_type":"DealRoom Data"}}