{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/what-valuation-method-is-required-for-an-sba-7-a-acquisition-loan-over-500-000","api_url":"https://dealroom.so/api/public/questions/what-valuation-method-is-required-for-an-sba-7-a-acquisition-loan-over-500-000","question":"What valuation method is required for an SBA 7(a) acquisition loan over $500,000?","topic":"Change of Ownership Underwriting","audience":"lender","bot_mode":"lender","short_answer":"For loans exceeding $500,000 involving a change of ownership, an independent third-party business valuation is required.","rule":"SBA policy mandates that for business acquisition loans where the total financing (including any financed seller debt) is greater than $500,000, an independent business valuation performed by a qualified appraiser is necessary. This valuation helps determine the fair market value of the business and supports the reasonableness of the purchase price, protecting both the lender and the SBA's interest.","example":"A borrower seeks a $750,000 SBA 7(a) loan to acquire an existing business. The lender must obtain a comprehensive business valuation report from a qualified, independent third-party appraiser to justify the purchase price.","what_lenders_check":"Lenders must ensure the appraiser is independent and qualified, the valuation report is thorough, and the purchase price is justified by the valuation. If the valuation comes in significantly below the purchase price, the deal structure may need adjustment, or the loan may not be approved.","required_facts":["Loan amount threshold","Independent appraiser","Fair market value","Purchase price justification"],"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 seller financing in a change of ownership?","url":"https://dealroom.so/for-lenders/questions/what-specific-due-diligence-is-required-for-seller-financing-in-a-change-of-ownership"},{"question":"How does the SBA evaluate goodwill in a business acquisition?","url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-evaluate-goodwill-in-a-business-acquisition"},{"question":"Can an SBA 7(a) loan be used to finance a new partner buying into an existing business?","url":"https://dealroom.so/for-lenders/questions/can-an-sba-7-a-loan-be-used-to-finance-a-new-partner-buying-into-an-existing-business"}],"related_terms":[{"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"},{"term":"Standard 7(a) loan","url":"https://dealroom.so/glossary/standard-7-a-loan"}],"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/for-lenders/questions/what-valuation-method-is-required-for-an-sba-7-a-acquisition-loan-over-500-000","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."]}