{"ok":true,"canonical_url":"https://dealroom.so/glossary/encumbrance","api_url":"https://dealroom.so/api/public/glossary/encumbrance","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":"encumbrance","term":"Encumbrance","group":"Doing the deal","definition":"An encumbrance is a claim or liability against an asset, like a lien or a mortgage, that restricts its transferability or use. It means someone else has a right to that asset.","what_it_means":"During an acquisition, your lender will perform lien searches to identify any existing encumbrances on the business's assets. All encumbrances must be cleared at closing to give your lender a first lien position on the collateral for your SBA loan. This ensures a clean transfer of assets.","url":"https://dealroom.so/glossary/encumbrance","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":"lien-search","term":"Lien Search","url":"https://dealroom.so/glossary/lien-search"},{"slug":"collateral","term":"Collateral","url":"https://dealroom.so/glossary/collateral"}],"related_questions":[{"question":"What if the business I'm acquiring has multiple outstanding liens or encumbrances on its assets?","url":"https://dealroom.so/sba-7a/questions/what-if-the-business-i-m-acquiring-has-multiple-outstanding-liens-or-encumbrances-on-its-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 — Encumbrance","url":"https://dealroom.so/glossary/encumbrance","source_type":"DealRoom Data"}}