{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/is-there-a-maximum-percentage-of-goodwill-that-an-sba-7-a-loan-can-finance-in-an-acquisiti","api_url":"https://dealroom.so/api/public/questions/is-there-a-maximum-percentage-of-goodwill-that-an-sba-7-a-loan-can-finance-in-an-acquisiti","question":"Is there a maximum percentage of goodwill that an SBA 7(a) loan can finance in an acquisition?","topic":"Goodwill Financing","audience":"borrower","bot_mode":"buyer","short_answer":"No, the SBA 7(a) program does not set a specific maximum percentage for financing goodwill, but the loan amount is determined by the business's overall cash flow and collateral.","rule":"While goodwill is an intangible asset, it is often a significant component of a business acquisition's purchase price. The SBA allows financing of goodwill as part of the overall acquisition, provided the business's projected cash flow can support the debt service, and the transaction is supported by a valuation.","example":"If a business is purchased for $1,000,000, with $200,000 in tangible assets and $800,000 attributed to goodwill, an SBA 7(a) loan can finance this acquisition, as long as the business's earnings justify the total purchase price and debt repayment.","what_lenders_check":"Lenders assess the sustainability of the business's earnings to cover the debt, particularly when a large portion of the purchase price is goodwill. They rely heavily on detailed financial projections and a professional business valuation to justify the loan amount.","required_facts":["No specific goodwill limit","Cash flow justification","Business valuation","Collateral considerations"],"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 is the maximum percentage of the purchase price that can be allocated to goodwill in an acquisition?","url":"https://dealroom.so/sba-7a/questions/what-is-the-maximum-percentage-of-the-purchase-price-that-can-be-allocated-to-goodwill-in-"},{"question":"How does the SBA ensure the valuation of goodwill is reasonable for an acquisition loan?","url":"https://dealroom.so/sba-7a/questions/how-does-the-sba-ensure-the-valuation-of-goodwill-is-reasonable-for-an-acquisition-loan"}],"related_terms":[{"term":"Maximum SBA 7(a) Loan Amount","url":"https://dealroom.so/glossary/maximum-sba-7-a-loan-amount"},{"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"}],"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":"2026-06-14","sba_rule_sources_checked_through":"2026-06-14"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/sba-7a/questions/is-there-a-maximum-percentage-of-goodwill-that-an-sba-7-a-loan-can-finance-in-an-acquisiti","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."]}