[Code of Federal Regulations]

[Title 13, Volume 1]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 13CFR123.11]



[Page 345]

 

                TITLE 13--BUSINESS CREDIT AND ASSISTANCE

 

                CHAPTER I--SMALL BUSINESS ADMINISTRATION

 

PART 123_DISASTER LOAN PROGRAM--Table of Contents

 

                           Subpart A_Overview

 

Sec. 123.11  Does SBA require collateral for any of its disaster loans?



    Generally, SBA will not require that you pledge collateral to secure 

a disaster home loan or a physical disaster business loan of $10,000 or 

less, or an economic injury disaster loan of $5,000 or less. For loans 

larger than these amounts, you will be required to provide available 

collateral such as a lien on the damaged or replacement property, a 

security interest in personal property, or both.

    (a) Sometimes a borrower, including affiliates as defined in part 

121 of this title, will have more than one loan after a single disaster. 

In deciding whether collateral is required, SBA will add up all physical 

disaster loans to see if they exceed $10,000 and all economic injury 

disaster loans to see if they exceed $5,000.

    (b) SBA will not decline a loan if you lack a particular amount of 

collateral as long as it is reasonably sure that you can repay your 

loan. If you refuse to pledge available collateral when requested by 

SBA, however, SBA may decline or cancel your loan.



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