SBA loan basics
Short answer
If your business assets aren't enough, the lender will typically seek additional collateral from other sources, including personal assets, to secure the SBA 7(a) loan.
The SBA requires lenders to take all available collateral, both business and personal, to secure the loan to the maximum extent possible. If business assets are insufficient, the lender will look to other sources of collateral, such as personal real estate (like your home), investment properties, or other liquid assets, to reduce the risk of default.
A business buying a service company for $400,000 has only $50,000 in hard business assets. The lender, to cover the remaining gap, might require a second lien on the business owner's unencumbered personal residence, valued at $200,000, as additional collateral.
Insider move
Lenders are obligated to secure the loan with all available collateral. Their primary concern is minimizing loss in the event of default, so they ensure comprehensive collateral coverage according to SBA guidelines, even if the SBA guaranty reduces their direct exposure.
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
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