SBA 7(a) Q&A
Short answer
Generally, all types of salable business inventory, including raw materials, work-in-process, and finished goods, are considered acceptable collateral for an SBA 7(a) loan.
The SBA's 'all available collateral' rule means lenders must secure a lien on all business assets, including inventory. The value of the inventory as collateral is typically based on its orderly liquidation value, and its quality and salability are key considerations.
A buyer acquires a manufacturing business with $250,000 in raw materials and finished products. The SBA lender will take a first lien on this inventory, valuing it at a discount (e.g., 50-70% of cost) for collateral purposes, based on its salability.
Insider move
Lenders evaluate the type, age, turnover rate, and marketability of the inventory. They may require periodic inventory reports and sometimes field exams to verify its existence and value, particularly for specialized or perishable goods.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
Last checked 2026-06-14. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-14 · SBA sources checked through 2026-06-14. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
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