SBA loans come with their own set of pros and cons, and for borrowers with substantial home equity, one major downside is the SBA’s personal property collateral rule. Specifically, for loans exceeding $500,000, if you have 25% equity in any personal real estate—whether that’s your home or an investment property—that equity has to be used as collateral, potentially up to the full loan amount. Notably, SBA lenders are instructed to deduct 15% from the appraised value of your residential property before calculating your equity ownership ratio.