SBA EIDL Collateral Requirements

SBA EIDL Collateral Requirements

The Economic Injury Disaster Loan (EIDL) program provides crucial financial support to businesses affected by disasters. Collateral plays an essential role in determining loan terms. Here’s what you need to know:

Collateral Rules Based on Loan Amount

  • Loans Under $25,000: No collateral required.
  • Loans Over $25,000: A general lien is placed on available business assets.
  • Loans Over $200,000: A personal guarantee may be required.

Types of Acceptable Collateral

The SBA places a blanket lien on business assets, including:

  • Equipment and machinery
  • Inventory and accounts receivable
  • Commercial real estate (if available)

Managing Your Collateral

To stay compliant and protect your assets:

  1. Keep an updated list of all business assets.
  2. Monitor existing UCC-1 liens from other lenders.
  3. If selling an asset, notify the SBA for lien adjustments.

Removing SBA Liens

The SBA will release its lien once the loan is fully repaid. If refinancing, consult with the SBA on how to clear the lien.