SBA loan basics
Short answer
If your business has limited assets, you will likely need to pledge personal assets, such as equity in your home or other real estate, to make up for any collateral shortfall. The SBA requires all available collateral.
The SBA's policy is to ensure that loans are "fully secured" to the maximum extent possible. If business assets are insufficient, the lender must take available equity in the personal real estate of the principals, up to the amount of the collateral shortfall.
A service-based business requests a $100,000 working capital loan but only has $20,000 in office equipment. The lender would require the business owner to pledge their personal home, if there is sufficient equity, to cover the remaining $80,000 collateral gap.
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
SBA 7(a) Loans Overview
Last checked 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. 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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