Can a lender take your personal assets after an SBA default?
Short answer
Yes, if you signed a personal guarantee. SBA Form 148 lets the lender demand full payment from you without first pursuing the business, other guarantors or collateral. Property you pledged can also be sold. Sources: SBA Form 148, para. 1; 13 CFR 120.545.
Yes, if you gave a guarantee or pledged the property. SBA Form 148 says the lender need not seek payment from any other source before demanding payment from you (para. 1).
What the guarantee reaches
- The full amount owing on the note, until it is paid in full (para. 1).
- Enforcement costs, including attorney's fees (para. 9.A).
- All guarantors, jointly and severally (para. 9.D).
A limited guarantee on SBA Form 148L limits exposure under the option chosen.
Collateral you pledged
SBA or the lender may sell real and personal property pledged to secure a loan in default. The security instrument controls how (13 CFR 120.545(c)). Whether a lien was required on your home depends on the loan and your equity (SOP 50 10 8.1, Appendix 19).
Non-owner spouses
A non-owner spouse's guaranty secured by jointly held collateralProperty a lender can take and sell if a loan is not repaid. is limited to that spouse's interest in the collateral (Sec. A, Ch. 5, Para. A.2.b, p. 93).
Farm borrowers
13 CFR 120.550 lets SBA lease a farm residence and limited adjoining property back to a qualifying farmer-borrower. Eligibility rules are in 13 CFR 120.551.
What is not covered here
Exemptions and the order of collection depend on state law and your documents. Form 148 leaves space for state-specific provisions (para. 10). Ask an attorney before relying on any protection.
Ask lending partners about your loan
Tell us the amount you need and what it is for. We refer you to lenders that may fund businesses like yours, and it costs you nothing.
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