{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/when-is-a-business-appraisal-required-for-a-change-of-ownership-transaction-exceeding-500-","api_url":"https://dealroom.so/api/public/questions/when-is-a-business-appraisal-required-for-a-change-of-ownership-transaction-exceeding-500-","question":"When is a business appraisal required for a change of ownership transaction exceeding $500,000?","topic":"Change-of-ownership underwriting","audience":"lender","bot_mode":"lender","short_answer":"A business valuation (appraisal) by a qualified, independent appraiser is required for all change of ownership transactions where the loan amount exceeds $500,000.","rule":"SBA requires a business valuation for acquisition loans over $500,000 to determine if the purchase price is reasonable and to assess the value of goodwill. This valuation must be performed by an independent, qualified source and conform to generally accepted appraisal standards.","example":"A borrower is acquiring a business for $750,000, requiring a $600,000 7(a) loan. The lender instructs the borrower to engage a qualified, independent business appraiser to conduct a valuation, as the loan amount exceeds $500,000.","what_lenders_check":"Lenders must ensure the appraiser is qualified, independent, and that the report conforms to SBA requirements. The valuation's conclusion on purchase price reasonableness directly impacts the lender's underwriting decision and the SBA guaranty.","required_facts":["Business appraisal","Change of ownership","Loan amount","Qualified appraiser","Purchase price reasonableness"],"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":"How does a lender evaluate the reasonableness of a business purchase price when the seller note is fully subordinated?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-evaluate-the-reasonableness-of-a-business-purchase-price-when-the-seller"},{"question":"What are the specific requirements for valuing inventory and equipment in a business acquisition for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/what-are-the-specific-requirements-for-valuing-inventory-and-equipment-in-a-business-acqui"},{"question":"When is an independent business appraisal mandatory for a 7(a) loan financing a business acquisition with a purchase price over $500,000?","url":"https://dealroom.so/for-lenders/questions/when-is-an-independent-business-appraisal-mandatory-for-a-7-a-loan-financing-a-business-ac"},{"question":"How does the SBA view a change of ownership where the new owner has no prior industry experience?","url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-view-a-change-of-ownership-where-the-new-owner-has-no-prior-industry-expe"},{"question":"Is an independent business appraisal required for a 7(a) loan financing a business acquisition with a purchase price exactly $500,000?","url":"https://dealroom.so/for-lenders/questions/is-an-independent-business-appraisal-required-for-a-7-a-loan-financing-a-business-acquisit"},{"question":"When must a lender require an independent business valuation for a change of ownership 7(a) loan, and what are the specific thresholds?","url":"https://dealroom.so/for-lenders/questions/when-must-a-lender-require-an-independent-business-valuation-for-a-change-of-ownership-7-a"}],"related_terms":[{"term":"Change-of-Ownership Transaction","url":"https://dealroom.so/glossary/change-of-ownership-transaction"},{"term":"Change of ownership","url":"https://dealroom.so/glossary/change-of-ownership"},{"term":"Complete Change of Ownership","url":"https://dealroom.so/glossary/complete-change-of-ownership"},{"term":"Change-of-ownership loan","url":"https://dealroom.so/glossary/change-of-ownership-loan"},{"term":"Change in ownership","url":"https://dealroom.so/glossary/change-in-ownership"},{"term":"Bona Fide Change of Ownership","url":"https://dealroom.so/glossary/bona-fide-change-of-ownership"}],"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/when-is-a-business-appraisal-required-for-a-change-of-ownership-transaction-exceeding-500-","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."]}