{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/when-is-an-independent-business-valuation-required-for-a-partner-buyout","api_url":"https://dealroom.so/api/public/questions/when-is-an-independent-business-valuation-required-for-a-partner-buyout","question":"When is an independent business valuation required for a partner buyout?","topic":"Partner & owner buyout","audience":"borrower","bot_mode":"buyer","short_answer":"An independent business valuation is required for any partner buyout where the amount being financed exceeds $500,000.","rule":"The SBA mandates an independent business valuation by a qualified appraiser for all changes of ownership, including partner buyouts, when the total loan amount (including any seller notes that are not on full standby) is greater than $500,000. This ensures the purchase price reflects fair market value.","example":"If a partner is buying out a 50% stake in a business for $600,000, an independent valuation is mandatory. However, if the buyout amount was $450,000, the lender could potentially use internal valuation methods or a less formal appraisal.","what_lenders_check":"Lenders confirm the appraiser's independence and qualifications. They carefully review the valuation report for methodology, assumptions, and consistency with industry standards, ensuring the purchased equity's value justifies the loan amount.","required_facts":["Loan over $500K","Independent appraiser","Fair market value","Mandatory requirement"],"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/document/sop-50-10-lender-development-company-loan-programs"},{"title":"13 CFR Part 120 — Business Loans","url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120"}],"related_questions":[{"question":"Can I buy out my business partner with an SBA 7(a) loan?","url":"https://dealroom.so/sba-7a/questions/can-i-buy-out-my-business-partner-with-an-sba-7-a-loan"},{"question":"Can a partner buyout be done with zero money down under the SBA?","url":"https://dealroom.so/sba-7a/questions/can-a-partner-buyout-be-done-with-zero-money-down-under-the-sba"},{"question":"What is the 24-month ownership rule for a $0-down SBA partner buyout?","url":"https://dealroom.so/sba-7a/questions/what-is-the-24-month-ownership-rule-for-a-0-down-sba-partner-buyout"},{"question":"Is a partner buyout a complete or partial change of ownership for the SBA?","url":"https://dealroom.so/sba-7a/questions/is-a-partner-buyout-a-complete-or-partial-change-of-ownership-for-the-sba"},{"question":"Does the remaining owner have to personally guarantee the SBA loan after a buyout?","url":"https://dealroom.so/sba-7a/questions/does-the-remaining-owner-have-to-personally-guarantee-the-sba-loan-after-a-buyout"},{"question":"Can the company itself redeem the departing partner's shares with an SBA loan?","url":"https://dealroom.so/sba-7a/questions/can-the-company-itself-redeem-the-departing-partner-s-shares-with-an-sba-loan"}],"related_terms":[{"term":"Buyout of a Partner","url":"https://dealroom.so/glossary/buyout-of-a-partner"},{"term":"Partner buyout","url":"https://dealroom.so/glossary/partner-buyout"},{"term":"Independent valuation","url":"https://dealroom.so/glossary/independent-valuation"},{"term":"Owner Buyout","url":"https://dealroom.so/glossary/owner-buyout"},{"term":"Qualified, independent business valuation","url":"https://dealroom.so/glossary/qualified-independent-business-valuation"},{"term":"Business valuation","url":"https://dealroom.so/glossary/business-valuation"}],"related_tools":[{"name":"Partner Buyout toolkit","url":"https://dealroom.so/sba-7a/partner-buyout"},{"name":"Find an active SBA 7(a) lender","url":"https://dealroom.so/lenders"}],"data_freshness":{"last_reviewed":"2026-06-15","sba_rule_sources_checked_through":"2026-06-15"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/sba-7a/questions/when-is-an-independent-business-valuation-required-for-a-partner-buyout","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."]}