Glossary · Doing the deal
In short
To liquidate means to sell off assets to convert them into cash, often to pay off debts. Buyers care because in a worst-case scenario, if the business fails, collateral assets would be liquidated to repay your SBA loan.
The SBA and your lender will assess the liquidation value of collateral pledged for your loan. While you're focused on success, understanding the lender's recourse in a default scenario is crucial. A liquidation plan is prepared if a loan defaults, outlining how assets will be sold to recover funds.
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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