{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/what-information-is-required-to-document-the-purchase-price-allocation-for-a-business-acqu","api_url":"https://dealroom.so/api/public/questions/what-information-is-required-to-document-the-purchase-price-allocation-for-a-business-acqu","question":"What information is required to document the purchase price allocation for a business acquisition?","topic":"Application timeline","audience":"borrower","bot_mode":"buyer","short_answer":"The purchase price allocation requires a detailed breakdown of the total purchase price across specific assets acquired, such as inventory, equipment, real estate, and goodwill, typically provided by the seller and buyer.","rule":"For business acquisitions, the SBA requires a clear allocation of the purchase price to various assets to ensure proper collateral valuation, determine eligible loan uses, and establish the basis for depreciation for the borrower. This allocation usually aligns with tax reporting requirements.","example":"A business purchased for $750,000 might allocate $100,000 to inventory, $150,000 to equipment, $200,000 to real estate, and $300,000 to goodwill. This breakdown must be documented in the purchase agreement or an addendum.","what_lenders_check":"Lenders review the purchase price allocation to ensure it is reasonable, supported by appraisals for assets like real estate and equipment, and aligns with the business valuation to avoid over-financing certain asset classes.","required_facts":["Purchase price","Asset breakdown","Inventory","Equipment","Real estate","Goodwill"],"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 are the major stages of the SBA 7(a) loan application process, and how long does each typically take?","url":"https://dealroom.so/sba-7a/questions/what-are-the-major-stages-of-the-sba-7-a-loan-application-process-and-how-long-does-each-t"},{"question":"What role does the business broker play in expediting or delaying the SBA 7(a) loan application process for an acquisition?","url":"https://dealroom.so/sba-7a/questions/what-role-does-the-business-broker-play-in-expediting-or-delaying-the-sba-7-a-loan-applica"},{"question":"What factors allow a lender to use their delegated authority (e.g., Preferred Lender status) to speed up SBA loan approval?","url":"https://dealroom.so/sba-7a/questions/what-factors-allow-a-lender-to-use-their-delegated-authority-e-g-preferred-lender-status-t"},{"question":"How long does the SBA 7(a) loan application process typically take from start to funding?","url":"https://dealroom.so/sba-7a/questions/how-long-does-the-sba-7-a-loan-application-process-typically-take-from-start-to-funding"},{"question":"What is the repayment term for an SBA 7(a) loan used for business acquisition?","url":"https://dealroom.so/sba-7a/questions/what-is-the-repayment-term-for-an-sba-7-a-loan-used-for-business-acquisition"},{"question":"Do I need a business plan for an SBA 7(a) loan application for a business acquisition?","url":"https://dealroom.so/sba-7a/questions/do-i-need-a-business-plan-for-an-sba-7-a-loan-application-for-a-business-acquisition"}],"related_terms":[{"term":"Purchase price allocation","url":"https://dealroom.so/glossary/purchase-price-allocation"},{"term":"Purchase price","url":"https://dealroom.so/glossary/purchase-price"},{"term":"Application for Guaranty","url":"https://dealroom.so/glossary/application-for-guaranty"},{"term":"Request for Additional Information","url":"https://dealroom.so/glossary/request-for-additional-information"},{"term":"Business acquisition","url":"https://dealroom.so/glossary/business-acquisition"},{"term":"Liquidation Timeline","url":"https://dealroom.so/glossary/liquidation-timeline"}],"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/what-information-is-required-to-document-the-purchase-price-allocation-for-a-business-acqu","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."]}