Glossary · The loan itself
In short
The percentage of a collateral's value a lender is willing to finance. For a buyer, this determines how much of your loan can be secured by specific assets like accounts receivable or inventory, impacting your collateral shortfall.
Lenders apply advance rates to different types of collateral, such as 75-85% for accounts receivable or 50% for inventory. If the total loan amount exceeds the available collateral after applying these rates, you'll have a collateral shortfall that needs to be addressed, often with a personal guarantee or additional assets.
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Defined by DealRoom.so SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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