For SBA lenders
Short answer
For loans over $250,000, a business valuation must be prepared by a qualified, independent appraiser, typically adhering to professional standards like USPAP.
For change-of-ownership loans where the loan amount (including other SBA loans to the borrower) exceeds $250,000, the SBA requires a business valuation from a qualified, independent source. The valuation must be comprehensive, support the purchase price, and often requires compliance with Uniform Standards of Professional Appraisal Practice (USPAP) by a certified appraiser. For loans of $250,000 or less, a lender's internal valuation or business broker's opinion may suffice if prudent lending standards are met.
A $700,000 7(a) loan is for a business acquisition. The lender commissions an independent business valuation from a credentialed appraiser who uses multiple valuation methods (e.g., asset-based, income-based, market-based) to determine the fair market value of the business.
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.
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