Glossary · Reading the business
In short
This is the estimated amount a lender could realistically get by selling the business's collateral if the loan defaults. It's a key part of how lenders assess risk.
When underwriting your 7(a) loan, the lender will analyze the recoverable value of the business's assets to see if they adequately secure the loan. If the recoverable value is low compared to the loan amount, it's a collateral shortfall, and you might need additional personal collateral.
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.
Pressure-test the numbers before you make an offer
Send us the asking price and the seller's cash flow — we'll show whether the deal services SBA debt and where the add-backs are likely to hold up.
Free · No documents · Usually same-day