{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/when-is-a-business-valuation-report-required-for-a-7-a-change-of-ownership-transaction-and","api_url":"https://dealroom.so/api/public/questions/when-is-a-business-valuation-report-required-for-a-7-a-change-of-ownership-transaction-and","question":"When is a business valuation report required for a 7(a) change of ownership transaction, and who must perform it?","topic":"Change-of-ownership","audience":"lender","bot_mode":"lender","short_answer":"A business valuation is required for all change of ownership transactions when the loan amount exceeds $500,000, and it must be performed by a qualified, independent appraiser.","rule":"SOP 50 10 mandates an independent business valuation for all change of ownership transactions where the loan amount exceeds $500,000. The valuation must be performed by a qualified appraiser with no conflict of interest, ensuring the purchase price is reasonable and supported.","example":"A lender processes a $750,000 7(a) loan for a business acquisition. Because the loan amount is over $500,000, they engage an independent, qualified business appraiser to provide a comprehensive valuation report.","what_lenders_check":"Lenders must ensure the valuation is performed by an acceptable appraiser, the report is thorough, and it supports the purchase price. Issues with the appraisal are a common reason for guaranty repairs or denials.","required_facts":["Loan amount > $500K","Independent appraiser","Qualified appraiser","No conflict of interest","Purchase price support"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 120 - Business Loans","Standard 7(a) Authorization File Library"],"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":"Standard 7(a) Authorization File Library","url":"https://www.sba.gov/document/support-standard-7a-authorization-file-library"}],"related_questions":[{"question":"What specific considerations apply to valuing goodwill and intangible assets in a 7(a) change-of-ownership transaction?","url":"https://dealroom.so/for-lenders/questions/what-specific-considerations-apply-to-valuing-goodwill-and-intangible-assets-in-a-7-a-chan"},{"question":"What is the maximum loan term allowed for a 7(a) loan used solely for working capital or equipment, without real estate?","url":"https://dealroom.so/for-lenders/questions/what-is-the-maximum-loan-term-allowed-for-a-7-a-loan-used-solely-for-working-capital-or-eq"},{"question":"How does the SBA account for an earn-out provision in a business acquisition for 7(a) loan purposes?","url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-account-for-an-earn-out-provision-in-a-business-acquisition-for-7-a-loan-"}],"related_terms":[{"term":"Change-of-Ownership Transaction","url":"https://dealroom.so/glossary/change-of-ownership-transaction"},{"term":"Business valuation report","url":"https://dealroom.so/glossary/business-valuation-report"},{"term":"Change of ownership","url":"https://dealroom.so/glossary/change-of-ownership"},{"term":"Valuation report","url":"https://dealroom.so/glossary/valuation-report"},{"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"}],"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-valuation-report-required-for-a-7-a-change-of-ownership-transaction-and","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."]}