SBA 7(a) Q&A
Short answer
Yes, a buyer's existing intellectual property (IP), such as a patented design, can be valued and counted towards the equity injection if it is essential to the acquired business and independently appraised.
Intangible assets like patents, trademarks, or copyrights owned by the buyer can be contributed as non-cash equity injection. The key requirements are that the IP must be essential to the operation or growth of the acquired business, its fair market value must be determined by a qualified, independent appraiser, and it must be legally transferred to the acquired business entity, free of any encumbrances.
If a buyer acquiring a software development company has a patented algorithm valued at $100,000 that will be integrated into the acquired business's products, this patent can count towards the buyer's equity injection for their $1,200,000 acquisition.
Insider move
Lenders require specialized appraisals for intellectual property to accurately assess its fair market value and its relevance to the business. They also verify legal ownership and the unencumbered transfer of the IP to the new entity.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
Last checked 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
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