Business Insights

Do You Need Collateral For An SBA 7(a) Loan?

Updated on August 5, 2026
Category: Business Loans

Pledging collateral for a business loan can seem complicated, but it doesn’t have to be.

In this article, we’ll break down the definition of collateral, why it’s necessary, and how you can get a loan without needing to pledge collateral at all.

Key Takeaways

Collateral is a set of assets pledged by a borrower to a lender, should the borrower default on their loan
Collateral could be almost anything, from business assets to personal assets
NEWITY facilitates non-collateral loans up to $50,000

What is Collateral?

When you apply for a loan, your lender needs to know that they’re protected. Even if your finances show that you are trustworthy, lenders often want extra protection against potential loss of value.

Collateral is that extra protection. If you as the borrower were to default on your loan, the lender would seize the collateral that was listed with the loan in order to get some or all of their money back.

How is Collateral Identified?

Items used as collateral could be nearly any store of value, including:

Equipment
Inventory
Furniture
Real Estate
Business Vehicles
Cash or Savings
Retirement Accounts
Patents, Trademarks, or Other Intellectual Property
Trading Assets

When evaluating collateral, lenders will consider the Adjusted Net Book Value (ANBV) of assets. This is a calculation that takes the original value of an asset, then subtracts depreciation, market conditions, wear and tear, forced liquidation value, and more.

How Much Collateral is Needed For a Loan

For some loans to be considered “fully secured”, the borrower must be able to offer enough value through their business assets to cover the loan amount.

If a borrower’s business assets do not total or surpass the loan amount, lenders may file liens on personal assets. This also may be required for owners with 20% ownership or more in the business, or any personal guarantors on the loan.

While this sounds daunting, pledging collateral will not impact your business long as you pay back your loan in accordance with the loan term.

Can You Get an SBA 7(a) Loan Without Collateral?

If you’re in need of fast cash, pledging collateral means extra paperwork and, consequently, extra time.

Further, you may be wanting to avoid tying up your assets in case they are needed for other financing or operational flexibility.

So, if you’re looking for quick capital, do not have sufficient collateral to secure a loan, or just simply do not want to tie up your assets, we can get you the funds you need without overcomplicating things.

NEWITY facilitates SBA 7(a) loans up to $50,000 without any collateral requirements.

After all, pledging collateral isn’t always the most convenient way to get the funds you need.

If you’re a start-up, you may not yet have sufficient assets to pledge. Service-based industries or digital businesses may not have much to offer, either.

How Does NEWITY Approach Collateral?

If a borrower is applying for an SBA 7(a) loan over $50,000, there are different collateral requirements from the process discussed above.

When a borrower has been approved for a loan through NEWITY, an All Business Assets (ABA) blanket UCC lien is filed on the borrower.

Essentially, this lien is a blanketed claim laid across a borrower’s assets, should that borrower default on their loan payments.

For SBA 7(a) loans specifically, in addition to this ABA UCC lien, NEWITY files UCC liens on any fixed assets (real estate, equipment, vehicles, etc.) that are valued above a certain dollar threshold, up to the total amount of the loan.

This UCC lien tied to specific assets is only filed on SBA loans above $50,000 if the borrower has fixed assets to which the lien can be tied.

If the borrower makes all agreed upon payments, these liens will not affect them or their business.

Does NEWITY Require Personal Collateral?

Personal collateral is not required on any type or size of loan through NEWITY.

Further, the amount of collateral or lack thereof that a business has to pledge will not affect the eligibility of an application through our program.

Whether you’re looking for a simple & quick loan without collateral or evaluating your assets for a loan over $50,000, our team of experts at NEWITY is ready to help you secure the funds you need 3x faster than the national average.

See what you could qualify for in just 10 minutes!

NEWITY LLC and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

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SBA International Trade Loans (ITL): Grocery Guarantee and...

Key Takeaways

The SBA expanded its International Trade Loan (ITL) program in May 2026 with two new initiatives — the Made in America Loan and the Grocery Guarantee Loan — offering up to $1M in working capital with a 90% federal guarantee, 15 percentage points higher than the standard SBA 7(a) program.
U.S. manufacturers under NAICS Sectors 31, 32, and 33 can now access up to $1M in long-term SBA-backed working capital through the Made in America Loan to fund reshoring, equipment upgrades, supply chain diversification, and domestic workforce expansion.
Agriculture, food retail, food processing, and food distribution businesses can now qualify for SBA financing through the Grocery Guarantee Loan — a historic shift that previously directed these businesses to USDA programs with significantly lower loan limits.
Both programs require a 600+ FICO score, $100K+ in annual revenue, and 2–3 years in business, with loan sizing based on DSCR or 35% of annual revenue, and repayment terms up to 10 years at WSJ Prime + 3.00%.

The SBA just expanded its International Trade Loan (ITL) program with two targeted initiatives: one for manufacturers and one for the food supply chain.

Here’s what you need to know.

01 — The SBA ITL: A Foundation for Growth

The ITL has long been a powerful tool in the SBA’s lending portfolio and these two new programs will further contribute to that.

The ITL was originally designed for one purpose: to help small businesses compete in a global economy. Whether a company was expanding into export markets or had been hurt by foreign competition, the ITL gave lenders the confidence to back them with a 90% SBA guarantee.

That guarantee is key.

It means the SBA covers up to 90 cents of every dollar if a loan defaults, dramatically lowering the risk for lenders and, in turn, making capital more accessible for borrowers.

For context, the SBA’s flagship 7(a) loan program carries a standard guarantee of 75%. The ITL’s 90% guarantee puts it in a different category with a stronger backstop, more lender confidence, and better odds of approval for businesses that might otherwise struggle to qualify.

Eligible uses under the ITL have always been broad: acquiring or upgrading U.S.-based facilities and equipment used in trade, bringing production back to American soil, working capital needs, and refinancing existing business debt on unreasonable terms.

Repayment terms stretch up to 25 years for real estate and 10 years for working capital, far longer than most conventional business loans.

Why the 90% guarantee matters to you: A higher federal guarantee means lenders take on less risk. This translates to broader approval rates, more favorable terms, and more willingness to lend to businesses in capital-intensive industries that traditional banks might hesitate on.

For years, the ITL remained a niche product, mostly used by exporters and import-competing manufacturers who could directly tie their loan purpose to international trade. That’s changing in a big way in 2026.

02 — How the New…