{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-evaluate-goodwill-in-a-business-acquisition","api_url":"https://dealroom.so/api/public/questions/how-does-the-sba-evaluate-goodwill-in-a-business-acquisition","question":"How does the SBA evaluate goodwill in a business acquisition?","topic":"Change of Ownership Underwriting","audience":"lender","bot_mode":"lender","short_answer":"The SBA permits financing of goodwill up to the maximum loan amount, but lenders must ensure the purchase price, including goodwill, is supported by a sound business valuation.","rule":"While the SBA does not specifically limit the amount of goodwill that can be financed, it requires that the overall purchase price, which may include goodwill, be reasonable and supported by a robust business valuation. The valuation assures the lender and SBA that the loan amount is justified by the underlying asset value and earning potential.","example":"A business is being acquired for $1.5 million, with $500,000 allocated to tangible assets and $1 million to goodwill. The lender requires a third-party business valuation report that justifies the $1.5 million purchase price based on the business's financial performance and industry metrics.","what_lenders_check":"Lenders must scrutinize business valuations to ensure they are prepared by qualified individuals and use appropriate methodologies. An unsupported or inflated valuation could lead to a guaranty denial.","required_facts":[],"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":[{"question":"What specific due diligence is required for seller financing in a change of ownership?","url":"https://dealroom.so/for-lenders/questions/what-specific-due-diligence-is-required-for-seller-financing-in-a-change-of-ownership"},{"question":"What valuation method is required for an SBA 7(a) acquisition loan over $500,000?","url":"https://dealroom.so/for-lenders/questions/what-valuation-method-is-required-for-an-sba-7-a-acquisition-loan-over-500-000"},{"question":"Can an SBA 7(a) loan be used to finance a new partner buying into an existing business?","url":"https://dealroom.so/for-lenders/questions/can-an-sba-7-a-loan-be-used-to-finance-a-new-partner-buying-into-an-existing-business"}],"related_terms":[{"term":"Change in ownership","url":"https://dealroom.so/glossary/change-in-ownership"},{"term":"Change of ownership","url":"https://dealroom.so/glossary/change-of-ownership"},{"term":"Complete Change of Ownership","url":"https://dealroom.so/glossary/complete-change-of-ownership"},{"term":"Change-of-ownership loan","url":"https://dealroom.so/glossary/change-of-ownership-loan"},{"term":"Change-of-Ownership Transaction","url":"https://dealroom.so/glossary/change-of-ownership-transaction"},{"term":"Bona Fide Change of Ownership","url":"https://dealroom.so/glossary/bona-fide-change-of-ownership"}],"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/for-lenders/questions/how-does-the-sba-evaluate-goodwill-in-a-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."]}