SBA
Do I need collateral for an SBA loan?
Written by
Alex Morgan · Head of Credit
Reviewed by
Betty Francis · Chief Compliance Officer
Last reviewed
June 12, 2026
Short Answer
SBA requires collateral when available, but will not decline an otherwise creditworthy loan solely for lack of collateral up to $500,000.
Detail
Per SBA SOP 50 10 7.1, lenders must take all available collateral on loans over $50K. However, the SBA will not decline a 7(a) loan solely because the applicant lacks collateral to fully secure the loan, provided the credit is otherwise sound. For loans over $500K, the SBA requires the loan be fully collateralized to the extent possible (real estate equity, equipment, business assets). Personal guarantees from 20%+ owners are always required.
Key facts
- Under $50K: no collateral required
- $50K–$500K: take available collateral
- Over $500K: fully collateralize to the extent possible
- Personal guarantee: always required for 20%+ owners
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