{"ok":true,"canonical_url":"https://dealroom.so/glossary/valuation","api_url":"https://dealroom.so/api/public/glossary/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":"valuation","term":"Valuation","aka":"Business valuation","group":"Reading the business","definition":"The process of determining the economic value of a business. For a buyer, a strong valuation justifies the purchase price and supports the SBA loan amount.","what_it_means":"For SBA loans over $250,000, an independent business appraisal is required. This valuation ensures the purchase price is fair and provides the lender with confidence in the asset's underlying value. Understand the valuation methods used, like SDE or EBITDA multiples, to challenge or confirm the price.","url":"https://dealroom.so/glossary/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":"business-valuation","term":"Business valuation","url":"https://dealroom.so/glossary/business-valuation"},{"slug":"sde","term":"SDE","url":"https://dealroom.so/glossary/sde"},{"slug":"ebitda","term":"EBITDA","url":"https://dealroom.so/glossary/ebitda"},{"slug":"multiple","term":"Multiple","url":"https://dealroom.so/glossary/multiple"}],"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 valuation methods are acceptable for assessing goodwill in an SBA acquisition?","url":"https://dealroom.so/sba-7a/questions/what-valuation-methods-are-acceptable-for-assessing-goodwill-in-an-sba-acquisition"},{"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"}]},"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 — Valuation","url":"https://dealroom.so/glossary/valuation","source_type":"DealRoom Data"}}