{"ok":true,"canonical_url":"https://dealroom.so/glossary/pro-rata-share-of-recovery","api_url":"https://dealroom.so/api/public/glossary/pro-rata-share-of-recovery","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-16","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"pro-rata-share-of-recovery","term":"Pro-rata share of recovery","group":"The loan itself","definition":"If an SBA loan defaults and collateral is liquidated, the SBA and the lender split the recovery proceeds based on their pro-rata share, usually reflecting the SBA's guaranty percentage. This ensures both parties recover losses proportionally.","what_it_means":"This concept applies if your business defaults and the lender liquidates collateral. The SBA takes its guaranteed percentage of the loan's loss, not the entire loan. The lender and SBA share any recovered funds based on their respective exposure after liquidation costs.","url":"https://dealroom.so/glossary/pro-rata-share-of-recovery","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"},{"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"}],"related":[{"slug":"sba-guaranty","term":"SBA guaranty","url":"https://dealroom.so/glossary/sba-guaranty"},{"slug":"loan-default","term":"Loan default","url":"https://dealroom.so/glossary/loan-default"},{"slug":"liquidation","term":"Liquidation","url":"https://dealroom.so/glossary/liquidation"},{"slug":"recourse","term":"Recourse","url":"https://dealroom.so/glossary/recourse"}],"related_questions":[{"question":"How is the valuation of an exiting partner's share handled for an SBA loan?","url":"https://dealroom.so/sba-7a/questions/how-is-the-valuation-of-an-exiting-partner-s-share-handled-for-an-sba-loan"},{"question":"Can an SBA 7(a) loan finance 100% of an existing partner's share buyout?","url":"https://dealroom.so/sba-7a/questions/can-an-sba-7-a-loan-finance-100-of-an-existing-partner-s-share-buyout"},{"question":"How does a lender comply with SBA requirements for maximizing recovery on collateral during liquidation?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-comply-with-sba-requirements-for-maximizing-recovery-on-collateral-durin"},{"question":"If I'm buying out a partner, can the SBA loan cover the entire 100% of their ownership share?","url":"https://dealroom.so/sba-7a/questions/if-i-m-buying-out-a-partner-can-the-sba-loan-cover-the-entire-100-of-their-ownership-share"},{"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 factors are considered when evaluating affiliation between businesses that share common management?","url":"https://dealroom.so/for-lenders/questions/what-factors-are-considered-when-evaluating-affiliation-between-businesses-that-share-comm"}]},"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 — Pro-rata share of recovery","url":"https://dealroom.so/glossary/pro-rata-share-of-recovery","source_type":"DealRoom Data"}}