{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-7-a-loan-program-value-and-take-collateral-on-proprietary-software-assets","api_url":"https://dealroom.so/api/public/questions/how-does-the-sba-7-a-loan-program-value-and-take-collateral-on-proprietary-software-assets","question":"How does the SBA 7(a) loan program value and take collateral on proprietary software assets for a tech company acquisition?","topic":"Collateral & Lien Requirements","audience":"lender","bot_mode":"lender","short_answer":"Proprietary software assets can be considered collateral for an SBA 7(a) loan, but their valuation requires specialized appraisal, and the lender must perfect a security interest through appropriate UCC filings.","rule":"While tangible assets are preferred, the SBA recognizes that some businesses have significant value in intangible assets. Proprietary software can be pledged as collateral if an independent, qualified appraiser determines its market value. The lender secures its interest via UCC filings on general intangibles.","example":"A borrower acquires a software development company for $2,000,000, where $1,500,000 is attributed to proprietary software code. A qualified intangible asset appraiser values the software at $1,200,000. The lender obtains a first lien on this software through a UCC filing covering general intangibles, alongside other business assets.","what_lenders_check":"Lenders must ensure an accurate and defensible valuation of software assets by a qualified third party. They must also correctly perfect their lien through UCC filings, understanding the challenges in liquidating such specialized assets in a default scenario.","required_facts":["Proprietary software","Intangible assets","Specialized appraisal","UCC filing","Lien perfection"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 120 - Business Loans","7(a) Loan Program Terms, Conditions, and Eligibility"],"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"},{"title":"7(a) Loan Program Terms, Conditions, and Eligibility","url":"https://www.sba.gov/partners/lenders/7a-loan-program/terms-conditions-eligibility"}],"related_questions":[{"question":"How does a lender determine if a blanket lien on all business assets is sufficient collateral for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-determine-if-a-blanket-lien-on-all-business-assets-is-sufficient-collate"},{"question":"What specific actions must a lender take to perfect a lien on intellectual property, such as patents or trademarks?","url":"https://dealroom.so/for-lenders/questions/what-specific-actions-must-a-lender-take-to-perfect-a-lien-on-intellectual-property-such-a"},{"question":"When can a lender waive the requirement for a lien on readily marketable personal assets of a guarantor?","url":"https://dealroom.so/for-lenders/questions/when-can-a-lender-waive-the-requirement-for-a-lien-on-readily-marketable-personal-assets-o"},{"question":"What specific documentation is required to properly collateralize life insurance on key principals for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/what-specific-documentation-is-required-to-properly-collateralize-life-insurance-on-key-pr"},{"question":"When is a lender permitted to take a second lien position on specific assets for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/when-is-a-lender-permitted-to-take-a-second-lien-position-on-specific-assets-for-a-7-a-loa"},{"question":"Under what circumstances can a lender waive a required personal guaranty for a 7(a) loan principal?","url":"https://dealroom.so/for-lenders/questions/under-what-circumstances-can-a-lender-waive-a-required-personal-guaranty-for-a-7-a-loan-pr"}],"related_terms":[{"term":"Proprietary Software","url":"https://dealroom.so/glossary/proprietary-software"},{"term":"SBA 7(a) Loan Program","url":"https://dealroom.so/glossary/sba-7-a-loan-program"},{"term":"SBA 7(a) program","url":"https://dealroom.so/glossary/sba-7-a-program"},{"term":"SBA 7(a) loan","url":"https://dealroom.so/glossary/sba-7-a-loan"},{"term":"7(a) loan","url":"https://dealroom.so/glossary/7a-loan"},{"term":"SBA 7(a) loan guaranty","url":"https://dealroom.so/glossary/sba-7-a-loan-guaranty"}],"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/for-lenders/questions/how-does-the-sba-7-a-loan-program-value-and-take-collateral-on-proprietary-software-assets","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."]}