{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/what-specific-due-diligence-is-required-for-accounts-receivable-included-in-a-business-acq","api_url":"https://dealroom.so/api/public/questions/what-specific-due-diligence-is-required-for-accounts-receivable-included-in-a-business-acq","question":"What specific due diligence is required for accounts receivable included in a business acquisition?","topic":"Change-of-Ownership Underwriting","audience":"lender","bot_mode":"lender","short_answer":"Lenders must perform due diligence on accounts receivable, including aging reports, customer concentration analysis, and verification of collectability, especially if they are part of the acquisition's collateral base.","rule":"When accounts receivable (A/R) are part of an acquisition, especially if used as collateral, lenders must assess their quality. This involves reviewing A/R aging schedules, identifying major customers (customer concentration), and evaluating historical collection rates and write-offs. Uncollectible or aged A/R should be discounted or excluded from valuation.","example":"A lender underwriting a $1 million business acquisition reviews the target company's A/R. The aging report shows $150,000 in A/R, but $40,000 is over 120 days old, and one customer accounts for 60% of current A/R. The lender discounts the aged A/R and requires additional analysis on the concentrated customer's payment history.","what_lenders_check":"The primary concern is the actual value and collectability of the A/R. Lenders must protect the collateral position by ensuring A/R is current and diversified. High customer concentration or significantly aged A/R increases risk and may impact the collateral value and the business's ongoing cash flow, warranting careful underwriting.","required_facts":["Accounts receivable","Aging report","Customer concentration","Collectability","Collateral valuation"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","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":"7(a) Loan Program Terms, Conditions, and Eligibility","url":"https://www.sba.gov/partners/lenders/7a-loan-program/terms-conditions-eligibility"}],"related_questions":[{"question":"What specific due diligence is required for a 7(a) loan involving a change of ownership between related parties?","url":"https://dealroom.so/for-lenders/questions/what-specific-due-diligence-is-required-for-a-7-a-loan-involving-a-change-of-ownership-bet"},{"question":"How does a lender evaluate the management experience of a buyer who has no prior experience in the target industry?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-evaluate-the-management-experience-of-a-buyer-who-has-no-prior-experienc"},{"question":"What happens if the business being acquired has significant outstanding tax liabilities at closing?","url":"https://dealroom.so/for-lenders/questions/what-happens-if-the-business-being-acquired-has-significant-outstanding-tax-liabilities-at"},{"question":"When is an independent business appraisal required for a change of ownership transaction exceeding $500,000?","url":"https://dealroom.so/for-lenders/questions/when-is-an-independent-business-appraisal-required-for-a-change-of-ownership-transaction-e"},{"question":"How does the SBA evaluate the reasonableness of goodwill in a 7(a) change-of-ownership transaction?","url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-evaluate-the-reasonableness-of-goodwill-in-a-7-a-change-of-ownership-tran"},{"question":"What is the primary factor in determining SBA 7(a) loan eligibility for a business acquisition when the seller retains a minority equity stake?","url":"https://dealroom.so/for-lenders/questions/what-is-the-primary-factor-in-determining-sba-7-a-loan-eligibility-for-a-business-acquisit"}],"related_terms":[{"term":"Accounts receivable","url":"https://dealroom.so/glossary/accounts-receivable"},{"term":"Due diligence","url":"https://dealroom.so/glossary/due-diligence"},{"term":"Lien on Accounts Receivable","url":"https://dealroom.so/glossary/lien-on-accounts-receivable"},{"term":"Operational due diligence","url":"https://dealroom.so/glossary/operational-due-diligence"},{"term":"Legal due diligence","url":"https://dealroom.so/glossary/legal-due-diligence"},{"term":"Inadequate due diligence","url":"https://dealroom.so/glossary/inadequate-due-diligence"}],"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-specific-due-diligence-is-required-for-accounts-receivable-included-in-a-business-acq","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."]}