For SBA lenders
Short answer
A lender must take a lien on available equity in personal real estate of principals with 20% or more ownership when business assets do not fully secure the loan, or when required by prudent lending standards.
SOP 50 10 states that if business assets do not fully secure the loan, the lender must take available equity in personal real estate (including residential) from all principals with 20% or more ownership as additional collateral, provided there is sufficient equity and it is economically feasible to do so.
A $1,000,000 7(a) loan is secured by $600,000 in business assets. The principals owning 20%+ have $200,000 in available equity in their personal residences. The lender must take a second lien on these residences to help secure the loan.
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