{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/when-must-a-lender-obtain-an-independent-business-valuation-for-a-change-of-ownership-betw","api_url":"https://dealroom.so/api/public/questions/when-must-a-lender-obtain-an-independent-business-valuation-for-a-change-of-ownership-betw","question":"When must a lender obtain an independent business valuation for a change-of-ownership between $250,000 and $500,000?","topic":"Change-of-Ownership Underwriting","audience":"lender","bot_mode":"lender","short_answer":"An independent business valuation is required for change-of-ownership transactions when the loan amount exceeds $250,000, regardless of whether real estate is involved or the purchase price is below $500,000.","rule":"SBA policy generally requires an independent business valuation for change-of-ownership loans exceeding $250,000. This ensures the purchase price is reasonable and supported by the business's value, protecting the integrity of the loan and collateral. This requirement is distinct from real estate appraisals.","example":"A lender is underwriting a $400,000 7(a) loan for a business acquisition. Even though the loan amount is under $500,000, it exceeds $250,000, so the lender must obtain an independent business valuation from a qualified appraiser to support the purchase price.","what_lenders_check":"Lenders must ensure the valuation is performed by a qualified, independent appraiser and is current. An inadequate or missing valuation is a critical underwriting error that can result in a significant repair or denial of the SBA guaranty.","required_facts":["Loan amount over $250k","Change-of-ownership","Independent valuation","Qualified appraiser"],"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 a 7(a) loan involving a change of ownership between related parties?","url":"https://dealroom.so/for-lenders/questions/what-specific-due-diligence-is-required-for-a-7-a-loan-involving-a-change-of-ownership-bet"},{"question":"How does a lender evaluate the management experience of a buyer who has no prior experience in the target industry?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-evaluate-the-management-experience-of-a-buyer-who-has-no-prior-experienc"},{"question":"What happens if the business being acquired has significant outstanding tax liabilities at closing?","url":"https://dealroom.so/for-lenders/questions/what-happens-if-the-business-being-acquired-has-significant-outstanding-tax-liabilities-at"},{"question":"When is an independent business appraisal required for a change of ownership transaction exceeding $500,000?","url":"https://dealroom.so/for-lenders/questions/when-is-an-independent-business-appraisal-required-for-a-change-of-ownership-transaction-e"},{"question":"How does the SBA evaluate the reasonableness of goodwill in a 7(a) change-of-ownership transaction?","url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-evaluate-the-reasonableness-of-goodwill-in-a-7-a-change-of-ownership-tran"},{"question":"What is the primary factor in determining SBA 7(a) loan eligibility for a business acquisition when the seller retains a minority equity stake?","url":"https://dealroom.so/for-lenders/questions/what-is-the-primary-factor-in-determining-sba-7-a-loan-eligibility-for-a-business-acquisit"}],"related_terms":[{"term":"Change of ownership","url":"https://dealroom.so/glossary/change-of-ownership"},{"term":"Independent valuation","url":"https://dealroom.so/glossary/independent-valuation"},{"term":"Qualified, independent business valuation","url":"https://dealroom.so/glossary/qualified-independent-business-valuation"},{"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-of-Ownership Transaction","url":"https://dealroom.so/glossary/change-of-ownership-transaction"}],"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":"2026-06-14","sba_rule_sources_checked_through":"2026-06-14"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/for-lenders/questions/when-must-a-lender-obtain-an-independent-business-valuation-for-a-change-of-ownership-betw","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."]}