{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/if-i-am-buying-out-my-50-partner-how-is-the-business-valuation-determined-for-an-sba-7-a-l","api_url":"https://dealroom.so/api/public/questions/if-i-am-buying-out-my-50-partner-how-is-the-business-valuation-determined-for-an-sba-7-a-l","question":"If I am buying out my 50% partner, how is the business valuation determined for an SBA 7(a) loan?","topic":"Partner Buyout Valuation","audience":"borrower","bot_mode":"buyer","short_answer":"A third-party, independent business valuation will be required to determine the fair market value of the business and the partner's share being acquired, regardless of internal agreements.","rule":"For a change of ownership, including a partner buyout, the SBA requires a professional, independent valuation of the business. This valuation ensures the purchase price is justified and the loan amount is reasonable based on the business's actual value, rather than an arbitrary internal agreement.","example":"Even if you and your partner agreed on a $500,000 valuation, the lender will commission a qualified appraiser to determine the fair market value. If the appraisal comes in lower, the loan amount will be based on that lower figure.","what_lenders_check":"Lenders rely on independent valuations to justify the loan amount and mitigate risk, especially in partner buyouts where conflicts of interest or inflated values can arise. They ensure the appraiser is qualified and disinterested.","required_facts":["Business valuation","Partner buyout","Third-party appraisal","Purchase price"],"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":"Business valuation","url":"https://dealroom.so/glossary/business-valuation"},{"term":"Business valuation report","url":"https://dealroom.so/glossary/business-valuation-report"},{"term":"Business Valuation Fees","url":"https://dealroom.so/glossary/business-valuation-fees"},{"term":"For-profit business","url":"https://dealroom.so/glossary/for-profit-business"},{"term":"Partner","url":"https://dealroom.so/glossary/partner"},{"term":"Alienate the Business","url":"https://dealroom.so/glossary/alienate-the-business"}],"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/if-i-am-buying-out-my-50-partner-how-is-the-business-valuation-determined-for-an-sba-7-a-l","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."]}