{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/can-the-value-of-customer-contracts-or-recurring-revenue-streams-count-as-collateral-for-a","api_url":"https://dealroom.so/api/public/questions/can-the-value-of-customer-contracts-or-recurring-revenue-streams-count-as-collateral-for-a","question":"Can the value of customer contracts or recurring revenue streams count as collateral for an SBA loan?","topic":"Collateral","audience":"borrower","bot_mode":"buyer","short_answer":"Yes, customer contracts and recurring revenue streams can be considered as part of the \"general intangibles\" collateral, but their valuation and enforceability are key.","rule":"The SBA requires a lien on all available business assets, which includes general intangibles. While not valued as highly as tangible assets, steady, predictable revenue from long-term customer contracts or subscription models can contribute to the overall collateral pool and repayment capacity.","example":"A software-as-a-service (SaaS) business being acquired has $500,000 in annual recurring revenue from multi-year customer contracts. The lender will take a lien on these contracts as part of the business's general intangibles.","what_lenders_check":"Lenders evaluate the quality, enforceability, and predictability of the recurring revenue. They look at contract terms, customer churn rates, and industry stability to determine the value of such collateral and its contribution to the business's ability to generate cash flow.","required_facts":[],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 120 - Business Loans"],"official_sources":[{"title":"SOP 50 10 - Lender and Development Company Loan Programs","url":"https://www.sba.gov/sites/default/files/2025-05/SOP%2050%2010%208%20Technical%20Updates%20effective%206.1.2025.docx"},{"title":"13 CFR Part 120 - Business Loans","url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120"}],"related_questions":[{"question":"What are the requirements for pledging inventory as collateral for an SBA 7(a) loan for a retail business acquisition?","url":"https://dealroom.so/sba-7a/questions/what-are-the-requirements-for-pledging-inventory-as-collateral-for-an-sba-7-a-loan-for-a-r"},{"question":"If the business assets are not enough, will the SBA require me to pledge my primary residence as collateral for a $700,000 loan?","url":"https://dealroom.so/sba-7a/questions/if-the-business-assets-are-not-enough-will-the-sba-require-me-to-pledge-my-primary-residen"},{"question":"Does an SBA 7(a) loan typically require collateral beyond the business assets?","url":"https://dealroom.so/sba-7a/questions/does-an-sba-7-a-loan-typically-require-collateral-beyond-the-business-assets"},{"question":"How does an SBA 7(a) loan handle intangible assets like intellectual property as collateral?","url":"https://dealroom.so/sba-7a/questions/how-does-an-sba-7-a-loan-handle-intangible-assets-like-intellectual-property-as-collateral"},{"question":"What types of assets can be used as collateral for an SBA 7(a) loan?","url":"https://dealroom.so/sba-7a/questions/what-types-of-assets-can-be-used-as-collateral-for-an-sba-7-a-loan"},{"question":"What if my personal residence is already mortgaged; can it still be used as collateral?","url":"https://dealroom.so/sba-7a/questions/what-if-my-personal-residence-is-already-mortgaged-can-it-still-be-used-as-collateral"}],"related_terms":[{"term":"Recurring revenue streams","url":"https://dealroom.so/glossary/recurring-revenue-streams"},{"term":"Recurring Revenue","url":"https://dealroom.so/glossary/recurring-revenue"},{"term":"Non-Recurring Revenue","url":"https://dealroom.so/glossary/non-recurring-revenue"},{"term":"Repair or denial of the SBA guaranty","url":"https://dealroom.so/glossary/repair-or-denial-of-the-sba-guaranty"},{"term":"Repair or Denial of the SBA Guarantee","url":"https://dealroom.so/glossary/repair-or-denial-of-the-sba-guarantee"},{"term":"Collateral Value","url":"https://dealroom.so/glossary/collateral-value"}],"related_tools":[{"name":"SBA 7(a) payment & fee calculator","url":"https://dealroom.so/sba-7a/calculator"},{"name":"Find an active SBA 7(a) lender","url":"https://dealroom.so/lenders"}],"data_freshness":{"last_reviewed":"2026-06-13","sba_rule_sources_checked_through":"2026-06-13"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/sba-7a/questions/can-the-value-of-customer-contracts-or-recurring-revenue-streams-count-as-collateral-for-a","source_type":"DealRoom Q&A"},"caveats":["Grounded in the current SBA rulebook; verify against official sources before relying on it for a live deal.","Not legal, tax, or financial advice and not an approval decision."]}