SBA 7(a) Q&A
Short answer
The SBA can accept intellectual property (IP) as collateral, but its valuation must be performed by a qualified appraiser, and securing a lien can be more complex than for tangible assets.
While tangible assets are preferred, the SBA recognizes that many modern businesses have substantial value in IP. Lenders must conduct proper due diligence on the IP, obtain a qualified appraisal, and ensure a legally enforceable lien can be perfected (e.g., through UCC filings or patent/trademark office registrations).
If you're acquiring a software development company for $2,000,000, where most of the value is in its proprietary code, a lender would require a specialized IP appraisal and would place a lien on the software copyrights and related trademarks.
Lenders worry about the liquidity and enforceability of liens on IP. They need to be confident in the valuation and the ability to realize value from the IP in case of default, often preferring a combination of IP and other collateral.
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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