{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/what-is-the-maximum-percentage-of-the-acquisition-price-that-can-be-attributed-to-goodwill","api_url":"https://dealroom.so/api/public/questions/what-is-the-maximum-percentage-of-the-acquisition-price-that-can-be-attributed-to-goodwill","question":"What is the maximum percentage of the acquisition price that can be attributed to goodwill for an SBA 7(a) loan?","topic":"Goodwill financing","audience":"borrower","bot_mode":"buyer","short_answer":"The SBA does not specify a maximum percentage of the acquisition price that can be attributed to goodwill for an SBA 7(a) loan.","rule":"While some conventional loans might have restrictions on financing intangible assets, the SBA 7(a) program is designed to support small business acquisitions, which often involve significant goodwill. The primary concern is that the total acquisition price, including goodwill, is supported by a justified valuation and the business's projected cash flow.","example":"If you purchase a consulting firm for $1,200,000 where the independent valuation attributes $1,000,000 to goodwill and only $200,000 to tangible assets, an SBA 7(a) loan could still finance this, assuming the business's earnings justify the overall price and loan repayment.","what_lenders_check":"Lenders focus intensely on the business's ability to generate sufficient cash flow to service debt, especially when a large portion of the purchase price is goodwill. They rely on detailed financial projections and the independent business valuation to ensure the acquisition is sound.","required_facts":[],"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":[{"question":"Is it possible to finance a business with an SBA 7(a) loan where most of its value is intangible assets like customer lists and brand reputation?","url":"https://dealroom.so/sba-7a/questions/is-it-possible-to-finance-a-business-with-an-sba-7-a-loan-where-most-of-its-value-is-intan"},{"question":"How does the SBA assess the value of \"blue sky\" or intangible assets when underwriting a business acquisition?","url":"https://dealroom.so/sba-7a/questions/how-does-the-sba-assess-the-value-of-blue-sky-or-intangible-assets-when-underwriting-a-bus"},{"question":"What percentage of a $1 million business acquisition can be financed by an SBA 7(a) loan if a significant portion is goodwill?","url":"https://dealroom.so/sba-7a/questions/what-percentage-of-a-1-million-business-acquisition-can-be-financed-by-an-sba-7-a-loan-if-"},{"question":"Is a separate business valuation required for an SBA 7(a) acquisition loan?","url":"https://dealroom.so/sba-7a/questions/is-a-separate-business-valuation-required-for-an-sba-7-a-acquisition-loan"},{"question":"Does financing a substantial amount of goodwill increase the required collateral for an SBA loan?","url":"https://dealroom.so/sba-7a/questions/does-financing-a-substantial-amount-of-goodwill-increase-the-required-collateral-for-an-sb"},{"question":"How do lenders determine the value of goodwill during the appraisal process for an SBA acquisition loan?","url":"https://dealroom.so/sba-7a/questions/how-do-lenders-determine-the-value-of-goodwill-during-the-appraisal-process-for-an-sba-acq"}],"related_terms":[{"term":"Goodwill","url":"https://dealroom.so/glossary/goodwill"},{"term":"Repair to the guaranty","url":"https://dealroom.so/glossary/repair-to-the-guaranty"},{"term":"Negative goodwill","url":"https://dealroom.so/glossary/negative-goodwill"},{"term":"Guaranty Percentage","url":"https://dealroom.so/glossary/guaranty-percentage"},{"term":"Purchase price","url":"https://dealroom.so/glossary/purchase-price"},{"term":"Acquisition","url":"https://dealroom.so/glossary/acquisition"}],"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/what-is-the-maximum-percentage-of-the-acquisition-price-that-can-be-attributed-to-goodwill","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."]}