Glossary · Doing the deal
In short
The process by which a lender reclaims and sells collateral to recoup losses when a loan defaults. As a buyer, understanding this process highlights the lender's security.
If an SBA 7(a) loan defaults, the lender will initiate asset recovery, seizing and selling the business's collateral to minimize their losses. This is why the lender conducts thorough collateral analysis and requires perfection of their liens. As a buyer, you need to understand what assets are pledged and how critical they are to the business's operation, as their loss would be devastating.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
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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