Glossary · Reading the business
In short
This refers to the likelihood that a lender can recoup its investment from a defaulted loan, usually by seizing and selling collateral. It's a key factor in underwriting.
Lenders assess the recoverability of their loan by evaluating the liquidation value of pledged collateral and the strength of personal guarantees. For your 7(a) loan, the lender will perform a collateral analysis to determine what assets could be sold to cover losses, impacting loan terms and collateral requirements.
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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