{"ok":true,"canonical_url":"https://dealroom.so/glossary/asset-based-approach","api_url":"https://dealroom.so/api/public/glossary/asset-based-approach","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"asset-based-approach","term":"Asset-based approach","group":"Reading the business","definition":"This is a business valuation method that determines a company's worth by summing the fair market value of its assets, minus its liabilities.","what_it_means":"For SBA loans, especially those with significant tangible collateral, the asset-based approach helps establish the liquidation value of the business's assets. While cash flow is primary, a strong asset base provides comfort to the lender and the SBA, acting as collateral. It's often used in conjunction with other valuation methods.","url":"https://dealroom.so/glossary/asset-based-approach","official_sources":[{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"}],"related":[{"slug":"collateral","term":"Collateral","url":"https://dealroom.so/glossary/collateral"},{"slug":"business-valuation","term":"Business valuation","url":"https://dealroom.so/glossary/business-valuation"},{"slug":"fair-market-value","term":"Fair market value","url":"https://dealroom.so/glossary/fair-market-value"},{"slug":"liquidation-value","term":"Liquidation Value","url":"https://dealroom.so/glossary/liquidation-value"}],"related_questions":[{"question":"What is the difference between an asset and stock purchase in a buyout?","url":"https://dealroom.so/sba-7a/questions/what-is-the-difference-between-an-asset-and-stock-purchase-in-a-buyout"},{"question":"What is the interest rate on an SBA 7(a) loan based on?","url":"https://dealroom.so/sba-loans/basics/what-is-the-interest-rate-on-an-sba-7-a-loan-based-on"},{"question":"What constitutes an ineligible business for an SBA 7(a) loan based on activity?","url":"https://dealroom.so/for-lenders/questions/what-constitutes-an-ineligible-business-for-an-sba-7-a-loan-based-on-activity"},{"question":"How does a recent significant personal asset purchase affect my SBA 7(a) loan application?","url":"https://dealroom.so/sba-7a/questions/how-does-a-recent-significant-personal-asset-purchase-affect-my-sba-7-a-loan-application"},{"question":"What if the business I'm acquiring is primarily home-based without a commercial storefront?","url":"https://dealroom.so/sba-7a/questions/what-if-the-business-i-m-acquiring-is-primarily-home-based-without-a-commercial-storefront"},{"question":"What if a business exceeds the SBA size standard based on revenue but not employees?","url":"https://dealroom.so/for-lenders/questions/what-if-a-business-exceeds-the-sba-size-standard-based-on-revenue-but-not-employees"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Asset-based approach","url":"https://dealroom.so/glossary/asset-based-approach","source_type":"DealRoom Data"}}