For SBA lenders
Short answer
Lenders underwrite inventory value by reviewing historical inventory levels, turnover rates, and aging reports, often requiring an independent inventory appraisal or a detailed inventory list and valuation from the seller.
Inventory is a current asset, but its value can fluctuate rapidly. Lenders assess its quality, salability, and potential for obsolescence. For significant inventory, an independent appraisal or a detailed, verified inventory list with cost/market value is required to ensure the stated value is reasonable and accurately represents its collateral potential.
A buyer acquires a retail business with $200,000 of inventory. The lender reviews the seller's inventory reports for the past three years, checking for slow-moving or obsolete items. They may require a physical count and valuation by a third-party appraiser or a detailed inventory schedule certified by the seller, matching historical cost.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
7(a) Loan Program — Terms, Conditions, and Eligibility
U.S. Small Business Administration · Official SBA source
SOP 50 10 - Lender and Development Company Loan Programs
Last checked 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
More on change-of-ownership underwriting
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