{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/what-if-the-collateral-for-a-7-a-loan-includes-accounts-receivable-from-government-contrac","api_url":"https://dealroom.so/api/public/questions/what-if-the-collateral-for-a-7-a-loan-includes-accounts-receivable-from-government-contrac","question":"What if the collateral for a 7(a) loan includes accounts receivable from government contracts?","topic":"Collateral & lien requirements","audience":"lender","bot_mode":"lender","short_answer":"If accounts receivable from government contracts are collateral, the lender must comply with the Federal Assignment of Claims Act, which requires specific procedures for assigning claims against the U.S. government.","rule":"The Federal Assignment of Claims Act (FACA) governs assignments of claims against the U.S. government. For accounts receivable from government contracts to be valid collateral, the assignment must be made to a bank or financial institution, and formal notices of assignment must be provided to the contracting officer, the disbursing officer, and the surety (if any). Failure to comply with FACA renders the assignment unenforceable against the government.","example":"A contractor applying for a 7(a) loan relies on a $500,000 receivable from a Department of Defense contract as collateral. The lender must ensure a valid assignment of claims is executed and notices are properly sent to the contracting officer and the disbursing officer for the Department of Defense, as per FACA.","what_lenders_check":"Lenders must understand and strictly adhere to FACA requirements to ensure their lien on government contract receivables is enforceable. Improper assignment can result in the loss of collateral value and potential guaranty repair if the loan defaults.","required_facts":["Accounts receivable source","Government contract","Federal Assignment of Claims Act","Assignment notification","Lien enforceability"],"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 specific requirements for securing a lien on titled vehicles as collateral for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/what-are-the-specific-requirements-for-securing-a-lien-on-titled-vehicles-as-collateral-fo"},{"question":"When can a lender justify accepting less than a 100% lien position on available business collateral for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/when-can-a-lender-justify-accepting-less-than-a-100-lien-position-on-available-business-co"},{"question":"How does the SBA require lenders to perfect security interests on accounts receivable and inventory?","url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-require-lenders-to-perfect-security-interests-on-accounts-receivable-and-"},{"question":"What specific collateral must be taken when a 7(a) loan is under-collateralized by business assets, even with a blanket lien?","url":"https://dealroom.so/for-lenders/questions/what-specific-collateral-must-be-taken-when-a-7-a-loan-is-under-collateralized-by-business"},{"question":"What are the specific lien priority requirements for lenders on both business and personal collateral securing a 7(a) loan, particularly when junior liens exist?","url":"https://dealroom.so/for-lenders/questions/what-are-the-specific-lien-priority-requirements-for-lenders-on-both-business-and-personal"},{"question":"What are the specific triggers for a lender to obtain an independent appraisal of business real estate for a 7(a) loan, based on loan amount thresholds?","url":"https://dealroom.so/for-lenders/questions/what-are-the-specific-triggers-for-a-lender-to-obtain-an-independent-appraisal-of-business"}],"related_terms":[{"term":"Accounts receivable","url":"https://dealroom.so/glossary/accounts-receivable"},{"term":"Government contracts","url":"https://dealroom.so/glossary/government-contracts"},{"term":"7(a) loan","url":"https://dealroom.so/glossary/7a-loan"},{"term":"Lien on Accounts Receivable","url":"https://dealroom.so/glossary/lien-on-accounts-receivable"},{"term":"Standard 7(a) loan","url":"https://dealroom.so/glossary/standard-7-a-loan"},{"term":"SBA 7(a) loan","url":"https://dealroom.so/glossary/sba-7-a-loan"}],"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/what-if-the-collateral-for-a-7-a-loan-includes-accounts-receivable-from-government-contrac","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."]}