SBA loan basics
Short answer
'Collateral' refers to assets that a borrower pledges to a lender to secure a loan, which the lender can seize if the borrower defaults.
For SBA 7(a) loans, collateral typically includes business assets like real estate, equipment, inventory, and accounts receivable, and sometimes personal assets if there's a shortfall. It provides a secondary source of repayment for the lender.
If a business takes out an SBA loan to buy a new machine, that machine itself becomes collateral. If the business cannot repay, the lender can potentially sell the machine to recover some of its losses.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
7(a) Loan Program — Terms, Conditions, and Eligibility
U.S. Small Business Administration · Official SBA source
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.
More on collateral requirements
Terms in this answer
Pre-qualify your SBA 7(a) deal
Tell us the business, the price, and where you are — we'll point you to the lenders most likely to fund a deal like yours and flag anything that trips up approval.
Free · No documents · Usually same-day