EIDL Collateral Requirements
Learn when collateral is required for EIDL loans, what types of collateral the SBA accepts, and how EIDL liens affect your assets.
Unlike many traditional business loans, EIDL has relatively flexible collateral requirements. The SBA does not decline disaster loans solely for lack of collateral, though they do require security interests for larger loans.
Standard Collateral Thresholds
EIDL collateral requirements vary by loan amount:
| Loan Amount | Collateral Requirement |
|---|---|
| $25,000 or less | No collateral required |
| $25,001 - $500,000 | General security agreement on business assets |
| Over $500,000 | Specific collateral including real estate if available |
Types of Acceptable Collateral
The SBA accepts various forms of collateral for EIDL:
- Business assets: Equipment, inventory, accounts receivable
- Real estate: Commercial or personal property
- Personal assets: Vehicles, investment accounts, other valuable property
- All business assets: General security agreement covering all current and future assets
UCC Filings
For loans requiring collateral, the SBA files UCC (Uniform Commercial Code) liens:
- Filed with your state's Secretary of State
- Creates a public record of the SBA's security interest
- Typically a blanket lien covering all business assets
- Remains until the loan is paid off and a release is filed
Impact on Future Financing
An EIDL UCC filing can affect your ability to obtain additional financing. Other lenders will see the SBA lien and may require subordination agreements or adjust their terms.
Real Estate Requirements
For larger loans, the SBA may require real estate collateral:
- Typically required for loans over $500,000
- The SBA will perfect a mortgage or deed of trust
- Can be commercial or residential property
- Does not need to fully secure the loan amount
- Appraisal may be required
COVID EIDL Modifications
The COVID-19 EIDL program had modified collateral rules:
- No collateral required for loans under $500,000
- Real estate not required until loans exceeded $500,000
- These were emergency provisions and may not apply to future disasters
Releasing Collateral
When your EIDL is paid off:
- Request a UCC termination from the SBA
- Request mortgage release for any real estate liens
- The SBA should file releases, but follow up to confirm
- Keep documentation of payoff and lien releases
After paying off your EIDL, check your state's UCC database to confirm the lien has been released. Unreleased liens can complicate future financing.
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Related Articles
What is an EIDL (Economic Injury Disaster Loan)?
Learn what EIDL loans are, understand their history including the COVID-19 program, and know the current status of SBA disaster lending programs.
Read more →What Are the Terms of an EIDL?
Learn the standard EIDL loan terms including interest rates, repayment periods, loan limits, and payment requirements for SBA disaster loans.
Read more →What is Collateral? (Business Loan Context)
Understanding collateral requirements for business loans, what assets qualify, and how collateral affects your loan terms and approval.
Read more →What is a UCC Filing?
Learn what a UCC-1 filing is, how it affects your business, and what lenders do with these filings to secure their loans.
Read more →Important Disclosure
Not Financial Advice: The information provided in this article is for general informational purposes only and does not constitute financial, legal, or professional advice. You should consult with qualified professionals before making any financial decisions.
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Rate Information: Rates, terms, and fees mentioned in this article are estimates based on publicly available information and may not reflect current market conditions or specific lender offers. Actual rates depend on creditworthiness, business financials, and lender policies.
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