Glossary · Reading the business
Trade secret
In short
This is confidential business information that gives a company a competitive edge, like a special recipe or proprietary process. It's a valuable intangible asset.
What it means in a deal
During due diligence, identify and understand any trade secrets, as they can be a significant part of the business's value. Ensure these are properly protected, documented, and transferable as part of the asset purchase. You'll want strong non-compete and confidentiality agreements from the seller.
Related terms
Common questions about Trade secret
- Can a 7(a) loan finance the purchase of intangible assets like customer lists or trade secrets in a business acquisition?
- Can an SBA 7(a) working capital loan be used to pay off seller's outstanding trade payables?
- Can I use the working capital portion of my SBA loan to pay off the acquired business's existing trade payables?
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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