For SBA lenders
Short answer
For titled vehicles serving as 7(a) loan collateral, the lender must perfect its lien by noting its interest on the vehicle's certificate of title, in accordance with state law.
SBA requires lenders to perfect their security interest in all collateral. For titled assets like vehicles, this means adhering to state Uniform Commercial Code (UCC) and motor vehicle title laws. The most common and effective method is to have the lender's lien recorded directly on the vehicle's certificate of title.
A business acquisition includes three delivery vans valued at $90,000. The lender perfects its lien by ensuring its name is listed as the lienholder on the certificate of title for each vehicle, as required by the state's Department of Motor Vehicles.
Insider move
Lenders must understand and comply with each state's specific requirements for perfecting liens on titled vehicles to ensure the SBA's lien position is valid and enforceable. Failure to properly perfect could result in a repair or denial of the SBA guaranty if the collateral cannot be recovered in liquidation.
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.
More on collateral & lien requirements
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