{"ok":true,"canonical_url":"https://dealroom.so/glossary/fair-market-value","api_url":"https://dealroom.so/api/public/glossary/fair-market-value","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":"fair-market-value","term":"Fair market value","group":"Reading the business","definition":"This is the estimated price an asset or business would sell for in an open and competitive market between a willing buyer and seller. It's crucial for determining if you're paying a reasonable price.","what_it_means":"For SBA loans, an independent appraisal determines the fair market value of the business and any real estate or significant assets. The loan amount cannot exceed this value. Ensure the valuation aligns with your offer to avoid issues with your loan application.","url":"https://dealroom.so/glossary/fair-market-value","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":"business-valuation","term":"Business valuation","url":"https://dealroom.so/glossary/business-valuation"},{"slug":"appraisal","term":"Appraisal","url":"https://dealroom.so/glossary/appraisal"},{"slug":"multiple","term":"Multiple","url":"https://dealroom.so/glossary/multiple"},{"slug":"goodwill","term":"Goodwill","url":"https://dealroom.so/glossary/goodwill"}],"related_questions":[{"question":"How does a lender determine the fair market value of business equipment used as collateral?","url":"https://dealroom.so/sba-7a/questions/how-does-a-lender-determine-the-fair-market-value-of-business-equipment-used-as-collateral"},{"question":"How does the SBA verify the fair market value of assets contributed as equity injection?","url":"https://dealroom.so/sba-7a/questions/how-does-the-sba-verify-the-fair-market-value-of-assets-contributed-as-equity-injection"},{"question":"If a borrower contributes equipment as equity, how does the lender verify its fair market value?","url":"https://dealroom.so/for-lenders/questions/if-a-borrower-contributes-equipment-as-equity-how-does-the-lender-verify-its-fair-market-v"},{"question":"How does the SBA evaluate the fair market value of goodwill in a business acquisition for financing?","url":"https://dealroom.so/sba-7a/questions/how-does-the-sba-evaluate-the-fair-market-value-of-goodwill-in-a-business-acquisition-for-"},{"question":"Can the fair market value of raw materials I contribute to the acquired business count towards equity?","url":"https://dealroom.so/sba-7a/questions/can-the-fair-market-value-of-raw-materials-i-contribute-to-the-acquired-business-count-tow"},{"question":"Can the fair market value of equipment I already own be used as equity for an acquisition?","url":"https://dealroom.so/sba-7a/questions/can-the-fair-market-value-of-equipment-i-already-own-be-used-as-equity-for-an-acquisition"}]},"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 — Fair market value","url":"https://dealroom.so/glossary/fair-market-value","source_type":"DealRoom Data"}}