{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/what-are-the-specific-requirements-for-a-lender-to-obtain-an-independent-business-valuatio","api_url":"https://dealroom.so/api/public/questions/what-are-the-specific-requirements-for-a-lender-to-obtain-an-independent-business-valuatio","question":"What are the specific requirements for a lender to obtain an independent business valuation for a change-of-ownership exceeding $500,000?","topic":"Change-of-Ownership Underwriting","audience":"lender","bot_mode":"lender","short_answer":"For transactions exceeding $500,000, an independent business valuation performed by a qualified appraiser is always required to substantiate the purchase price and ensure it reflects fair market value.","rule":"SBA policy mandates an independent business valuation for all change-of-ownership transactions where the loan amount (or total project cost) exceeds $500,000. This ensures the reasonableness of the purchase price and protects the SBA's interest in the transaction, validating the underlying value of the business.","example":"A lender is underwriting a $1,200,000 7(a) loan for a business acquisition. Because the loan amount exceeds $500,000, the lender commissions an independent business valuation from a credentialed appraiser to confirm the business's fair market value supports the $1,200,000 purchase price.","what_lenders_check":"Lenders must ensure the valuation is from an independent, qualified professional and is current. An absent, inadequate, or outdated valuation for loans over $500,000 is a severe underwriting deficiency that can result in a major guaranty repair or denial.","required_facts":["Loan amount over $500k","Change-of-ownership","Independent business valuation","Qualified appraiser"],"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 a 7(a) loan involving a change of ownership between related parties?","url":"https://dealroom.so/for-lenders/questions/what-specific-due-diligence-is-required-for-a-7-a-loan-involving-a-change-of-ownership-bet"},{"question":"How does a lender evaluate the management experience of a buyer who has no prior experience in the target industry?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-evaluate-the-management-experience-of-a-buyer-who-has-no-prior-experienc"},{"question":"What happens if the business being acquired has significant outstanding tax liabilities at closing?","url":"https://dealroom.so/for-lenders/questions/what-happens-if-the-business-being-acquired-has-significant-outstanding-tax-liabilities-at"},{"question":"When is an independent business appraisal required for a change of ownership transaction exceeding $500,000?","url":"https://dealroom.so/for-lenders/questions/when-is-an-independent-business-appraisal-required-for-a-change-of-ownership-transaction-e"},{"question":"How does the SBA evaluate the reasonableness of goodwill in a 7(a) change-of-ownership transaction?","url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-evaluate-the-reasonableness-of-goodwill-in-a-7-a-change-of-ownership-tran"},{"question":"What is the primary factor in determining SBA 7(a) loan eligibility for a business acquisition when the seller retains a minority equity stake?","url":"https://dealroom.so/for-lenders/questions/what-is-the-primary-factor-in-determining-sba-7-a-loan-eligibility-for-a-business-acquisit"}],"related_terms":[{"term":"Independent valuation","url":"https://dealroom.so/glossary/independent-valuation"},{"term":"Qualified, independent business valuation","url":"https://dealroom.so/glossary/qualified-independent-business-valuation"},{"term":"Business valuation","url":"https://dealroom.so/glossary/business-valuation"},{"term":"M&A advisor","url":"https://dealroom.so/glossary/ma-advisor"},{"term":"Business valuation report","url":"https://dealroom.so/glossary/business-valuation-report"},{"term":"Business Valuation Fees","url":"https://dealroom.so/glossary/business-valuation-fees"}],"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/for-lenders/questions/what-are-the-specific-requirements-for-a-lender-to-obtain-an-independent-business-valuatio","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."]}