{"ok":true,"canonical_url":"https://dealroom.so/glossary/business-valuation","api_url":"https://dealroom.so/api/public/glossary/business-valuation","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":"business-valuation","term":"Business valuation","group":"Reading the business","definition":"An independent appraisal the lender orders. The SBA loan can't finance any amount above it.","what_it_means":"For SBA deals over a set threshold, the lender must order an independent business valuation from a qualified appraiser. If the appraised value comes in below the purchase price, the SBA loan can only be sized against the appraised value — not the price you agreed to pay. This creates a gap you'd need to fund with additional injection. Experienced buyers sometimes commission their own valuation before going to contract to avoid surprises.","url":"https://dealroom.so/glossary/business-valuation","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":"goodwill","term":"Goodwill","url":"https://dealroom.so/glossary/goodwill"},{"slug":"multiple","term":"Multiple","url":"https://dealroom.so/glossary/multiple"},{"slug":"irs-transcripts","term":"IRS transcripts (4506-T)","url":"https://dealroom.so/glossary/irs-transcripts"},{"slug":"total-project-costs","term":"Total project costs","url":"https://dealroom.so/glossary/total-project-costs"}],"related_questions":[{"question":"When is an independent business valuation required for a partner buyout?","url":"https://dealroom.so/sba-7a/questions/when-is-an-independent-business-valuation-required-for-a-partner-buyout"},{"question":"What if the business valuation is insufficient to support the purchase price?","url":"https://dealroom.so/sba-7a/questions/what-if-the-business-valuation-is-insufficient-to-support-the-purchase-price"},{"question":"What is the importance of a professional business valuation for an acquisition?","url":"https://dealroom.so/sba-7a/questions/what-is-the-importance-of-a-professional-business-valuation-for-an-acquisition"},{"question":"Is a separate business valuation required for an SBA 7(a) acquisition loan?","url":"https://dealroom.so/sba-7a/questions/is-a-separate-business-valuation-required-for-an-sba-7-a-acquisition-loan"},{"question":"What happens if my business valuation comes in lower than the purchase price?","url":"https://dealroom.so/sba-loans/basics/what-happens-if-my-business-valuation-comes-in-lower-than-the-purchase-price"},{"question":"How thoroughly does the SBA review the business valuation report provided by the lender?","url":"https://dealroom.so/sba-7a/questions/how-thoroughly-does-the-sba-review-the-business-valuation-report-provided-by-the-lender"}]},"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 — Business valuation","url":"https://dealroom.so/glossary/business-valuation","source_type":"DealRoom Data"}}