Glossary · Reading the business
Proprietary Software
In short
This is software developed and owned exclusively by the business, giving it a unique competitive advantage. It's a valuable intangible asset, often critical to operations or product delivery.
What it means in a deal
If the business relies heavily on proprietary software, you need to understand its functionality, maintenance requirements, and intellectual property protections. During due diligence, confirm the business truly owns it and that you will receive all necessary licenses, source code, and transferrable rights post-acquisition. This asset can be part of the collateral package as a general intangible.
Related terms
Common questions about Proprietary Software
- What if the business for sale uses proprietary software or a unique technology?
- How does the SBA 7(a) loan program value and take collateral on proprietary software assets for a tech company acquisition?
- How does a lender perfect a lien on intangible assets such as customer lists or proprietary software for a 7(a) loan?
- How does a lender underwrite a 7(a) business acquisition where a significant portion of the assets are intangible, such as proprietary software?
- How does the SBA typically value intangible assets like customer lists or software for collateral?
- How does the SBA handle a loan where the business assets are mostly intellectual property, such as software code?
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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