{"ok":true,"canonical_url":"https://dealroom.so/sba-loans/basics/how-much-of-the-acquired-business-s-value-can-be-goodwill-for-a-7-a-loan","api_url":"https://dealroom.so/api/public/questions/how-much-of-the-acquired-business-s-value-can-be-goodwill-for-a-7-a-loan","question":"How much of the acquired business's value can be 'goodwill' for a 7(a) loan?","topic":"Goodwill Valuation","audience":"new","bot_mode":"buyer","short_answer":"An SBA 7(a) loan can finance a significant portion of a business's purchase price that is attributed to goodwill, with no specific cap on the percentage of goodwill.","rule":"The SBA does not set a specific maximum percentage for goodwill in a business acquisition. Instead, the focus is on a thorough valuation of the business as a going concern, including both tangible and intangible assets (like goodwill, customer base, brand reputation). The lender must ensure the purchase price, including goodwill, is justified by the business's earning potential and market value.","example":"A service business is being acquired for $1,200,000. Its tangible assets (equipment, inventory) are valued at $300,000. The remaining $900,000 is attributed to goodwill. The SBA 7(a) loan can finance this acquisition, provided the total purchase price is supported by a robust business valuation.","what_lenders_check":"Lenders require an independent business valuation for acquisitions, especially when goodwill is a substantial component. They ensure the valuation is sound, defensible, and supports the purchase price, demonstrating the business's ability to generate sufficient cash flow to service the debt.","required_facts":["No specific cap","Independent valuation","Going concern","Earning potential"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 120 - Business Loans","7(a) Loan Program Terms, Conditions, and Eligibility"],"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"},{"title":"7(a) Loan Program Terms, Conditions, and Eligibility","url":"https://www.sba.gov/partners/lenders/7a-loan-program/terms-conditions-eligibility"}],"related_questions":[],"related_terms":[{"term":"7(a) loan","url":"https://dealroom.so/glossary/7a-loan"},{"term":"Standard 7(a) loan","url":"https://dealroom.so/glossary/standard-7-a-loan"},{"term":"SBA 7(a) loan","url":"https://dealroom.so/glossary/sba-7-a-loan"},{"term":"7(a) Small Loan","url":"https://dealroom.so/glossary/7-a-small-loan"},{"term":"Variable-rate 7(a) loan","url":"https://dealroom.so/glossary/variable-rate-7-a-loan"},{"term":"SBA 7(a) Loan Program","url":"https://dealroom.so/glossary/sba-7-a-loan-program"}],"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-loans/basics/how-much-of-the-acquired-business-s-value-can-be-goodwill-for-a-7-a-loan","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."]}