For SBA lenders
Short answer
A lender can waive the requirement for a lien on readily marketable personal assets when the business assets fully secure the loan, or when the cost of taking the lien exceeds the value of the collateral.
SBA policy generally requires a lien on readily marketable equity in personal real estate of principals when the business assets do not fully secure the loan. However, lenders are not required to take a lien if the loan is fully secured by business assets or if the cost of liquidating the personal asset would exceed the recoverable value. This decision must be documented and justified.
For a $300,000 7(a) loan fully secured by business real estate valued at $450,000, a lender might waive taking a lien on a guarantor's personal investment portfolio. The lender would document that the business assets provide ample security, making the additional lien unnecessary.
Insider move
Lenders must balance the need for collateral with prudent cost-effectiveness. Justifying the waiver of a lien on personal assets is crucial to demonstrate adherence to prudent lending practices and avoid questions during a guaranty purchase review.
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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