Glossary · Reading the business
Patent
In short
This is a government-granted right to an inventor to exclude others from making, using, or selling an invention for a set period. For a buyer, patents can provide a significant competitive moat and protect proprietary technology.
What it means in a deal
If the business relies on patented technology, due diligence must confirm the patent's validity, remaining term, and clear ownership transfer. Patents are valuable intellectual property that can justify a higher business valuation, but their legal enforceability is key.
Related terms
Common questions about Patent
- Can an SBA 7(a) loan be used to purchase intellectual property, like a patent or trademark?
- What documentation is required to perfect a lien on intellectual property, such as a patent or trademark, as collateral?
- Can an SBA 7(a) loan be used to purchase a patent or other intellectual property as a primary asset?
- Can an SBA 7(a) loan finance the purchase of intellectual property, like a patent portfolio, as a primary asset?
- Can a buyer's intellectual property, like a patent or software, be included as collateral for an SBA 7(a) loan?
- If I want to contribute intellectual property like a patent as part of my equity injection, how is its value determined?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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