For SBA lenders
Short answer
The SBA determines sufficient collateral by evaluating the market value of available business assets, and if insufficient, requiring available equity in personal real estate from 20%+ owners, provided it's economically feasible.
SOP 50 10 requires lenders to take all available collateral up to the loan amount. This includes a first lien on all business assets. If business assets are insufficient, the lender must take available equity in personal real estate of principals with 20% or more ownership. The SBA wants to ensure that the loan is prudently secured to mitigate loss.
A $750,000 loan is secured by $500,000 in business assets. The lender identifies a $100,000 equity position in a 20% owner's home. The lender must take a lien on this personal residence, bringing total collateral to $600,000.
Insider move
Lenders must conduct thorough collateral appraisals and searches, and ensure all available collateral is taken and properly perfected. Failure to adequately secure the loan can lead to a guaranty repair or denial.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
Servicing and Liquidation Actions 7(a) Lender Matrix
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
Terms in this answer
Pre-qualify your SBA 7(a) deal
Tell us the business, the price, and where you are — we'll point you to the lenders most likely to fund a deal like yours and flag anything that trips up approval.
Free · No documents · Usually same-day