Glossary · Reading the business
Patents
In short
Patents protect inventions, giving the owner exclusive rights. If the business relies on patented technology, you need to verify ownership and transferability during due diligence.
What it means in a deal
If the business you're acquiring has patents, these are valuable intangible assets. During due diligence, confirm the patents are valid, owned by the seller, and properly maintained. Ensure the purchase agreement includes a clear assignment of all intellectual property, including patents, to your new entity. This protects your right to use and benefit from the technology.
Related terms
Common questions about Patents
- Does the SBA require a lien on intellectual property, like trademarks or patents, as collateral?
- Can an SBA 7(a) loan finance the purchase of intellectual property, like patents or trademarks?
- Are patents or trademarks eligible collateral for an SBA 7(a) loan for a business acquisition?
- Are intellectual property assets, like patents or trademarks, acceptable collateral for an SBA 7(a) loan?
- Can an SBA 7(a) loan be used to purchase intellectual property like patents or trademarks?
- For a business heavily reliant on patents or trademarks, can that intellectual property be used as primary collateral?
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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