SBA loan basics
Short answer
If business assets do not fully cover the loan amount, the lender will require additional collateral, which often includes personal assets from the business owners, to secure the loan.
SBA policy requires that lenders secure loans with all available assets, both business and personal, up to the full loan amount. This ensures that the lender acts prudently and minimizes potential losses in case of default.
A business acquires a $750,000 loan but only has $400,000 in business assets. The lender will require the owner to pledge personal real estate, such as their home, to cover the remaining $350,000 gap in collateral.
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.
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