All You Need To Know About Collateral
The answer to this question is yes and no. The reason why it isn’t black and white is because it largely depends on a few variables. So let me bring some clarity to this question.
If you are requesting a working capital loan less than $350,000 then it’s likely tangible personal or real property, or in other words collateral, is not required. However, when the loan amount is higher than $350,000 then collateral is required.
The actual amount of collateral varies and is determined by the requested loan amount, the amount of collateral available and purpose of the loan.
The definition of acceptable collateral includes but is not limited to equipment, tenant improvements and real property typically in the form of a second lien on the applicants primary residence for working capital term loans or commercial real real estate when the loan type is a commercial mortgage for the purpose of acquiring owner-occupied commercial real estate.
My SBA Loan Pro
The My SBA Loan Pro Podcast is hosted by Your SBA Loan Pro, Ryan Smith. In each episode Ryan provides valuable information and best practices regarding the SBA loan program.
Each episode is approximately one minute in length and addresses topics related specifically to SBA 7(a) and 504 loan programs to purchase real estate, acquire a business or franchise and obtain working capital.
You’re encouraged to listen and subscribe to ensure you’re notified each time a new episode is available. Ryan publishes a new episode weekly on Tuesday mornings, unless he’s kidnapped to a deserted island of course.