For SBA lenders
Short answer
For all 7(a) loans, the SBA requires the lender to take all available business assets with a lien position on specific collateral up to the loan amount, if available, at liquidation value.
SBA policy mandates that lenders obtain a first lien on all available assets of the business, including real estate, equipment, inventory, and accounts receivable, up to the loan amount. If business assets are insufficient, personal assets of the guarantors may be required to adequately secure the loan.
For a $1,000,000 loan, the lender first takes a lien on all business assets valued at $700,000. To fully collateralize, the lender might require a lien on personal real estate from a guarantor to cover the remaining $300,000, if available.
Lenders must ensure all available business assets are properly identified and secured with appropriate lien filings. Failure to properly collateralize can result in a repair or denial of the SBA guaranty.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
7(a) Loan Program — Terms, Conditions, and Eligibility
U.S. Small Business Administration · Official SBA source
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.
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