{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/can-an-sba-7-a-loan-finance-100-of-the-goodwill-in-a-1-500-000-business-acquisition","api_url":"https://dealroom.so/api/public/questions/can-an-sba-7-a-loan-finance-100-of-the-goodwill-in-a-1-500-000-business-acquisition","question":"Can an SBA 7(a) loan finance 100% of the goodwill in a $1,500,000 business acquisition?","topic":"Goodwill Financing Limit","audience":"borrower","bot_mode":"buyer","short_answer":"Yes, an SBA 7(a) loan can finance up to 100% of the goodwill in a business acquisition, provided the overall loan-to-value is acceptable and the business cash flow supports the debt.","rule":"The SBA permits financing of goodwill as part of a business acquisition. Unlike some conventional loans, there isn't a specific cap on the percentage of goodwill that can be financed by the SBA 7(a) loan, as long as the entire project is supported by a sound business valuation and the borrower's equity injection.","example":"If a $1,500,000 acquisition includes $1,000,000 in goodwill and $500,000 in tangible assets, the SBA loan can theoretically finance all $1,000,000 of the goodwill, assuming the 10% equity injection is met on the total project cost.","what_lenders_check":"While goodwill is financeable, lenders are highly focused on the business's historical and projected cash flow to service debt, especially when a large portion of the purchase price is goodwill. They also rely heavily on a robust business valuation.","required_facts":["Goodwill amount","Business acquisition","Loan-to-value","Cash flow"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 120 - Business Loans"],"official_sources":[{"title":"SOP 50 10 - Lender and Development Company Loan Programs","url":"https://www.sba.gov/sites/default/files/2025-05/SOP%2050%2010%208%20Technical%20Updates%20effective%206.1.2025.docx"},{"title":"13 CFR Part 120 - Business Loans","url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120"}],"related_questions":[],"related_terms":[{"term":"SBA 7(a) loan","url":"https://dealroom.so/glossary/sba-7-a-loan"},{"term":"7(a) loan","url":"https://dealroom.so/glossary/7a-loan"},{"term":"SBA 7(a) Loan Program","url":"https://dealroom.so/glossary/sba-7-a-loan-program"},{"term":"SBA 7(a) loan guaranty","url":"https://dealroom.so/glossary/sba-7-a-loan-guaranty"},{"term":"SBA 7(a) program","url":"https://dealroom.so/glossary/sba-7-a-program"},{"term":"Standard 7(a) loan","url":"https://dealroom.so/glossary/standard-7-a-loan"}],"related_tools":[{"name":"SBA 7(a) payment & fee calculator","url":"https://dealroom.so/sba-7a/calculator"},{"name":"Find an active SBA 7(a) lender","url":"https://dealroom.so/lenders"}],"data_freshness":{"last_reviewed":"2026-06-13","sba_rule_sources_checked_through":"2026-06-13"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/sba-7a/questions/can-an-sba-7-a-loan-finance-100-of-the-goodwill-in-a-1-500-000-business-acquisition","source_type":"DealRoom Q&A"},"caveats":["Grounded in the current SBA rulebook; verify against official sources before relying on it for a live deal.","Not legal, tax, or financial advice and not an approval decision."]}