Glossary · Doing the deal
In short
Refers to an asset that is free and clear of any liens, mortgages, or other legal claims by creditors. Lenders prefer unencumbered collateral for their security.
For an SBA 7(a) loan, the lender will want to ensure the business's assets offered as collateral are "unencumbered" or that any existing liens will be paid off at closing. A UCC lien search is performed to verify this. Assets with unencumbered status give the lender confidence in their security interest.
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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