For SBA lenders
Short answer
Yes, if the business assets do not sufficiently secure the loan, personal real estate (including a personal residence) may be required as additional collateral for a loan of any size.
SBA policy dictates that if there is a collateral shortfall after pledging all available business assets, the lender must take available equity in personal real estate. The decision to take personal real estate is based on prudent lending standards and the degree of the collateral gap.
A $200,000 loan is backed by $100,000 of business assets. The lender identifies that the borrower has $75,000 of available equity in their personal residence. The lender would require a mortgage on the personal residence to cover the collateral shortfall.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
Last checked 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
More on collateral & lien requirements
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