For SBA lenders
Short answer
There is no specific maximum percentage of a 7(a) loan that can be allocated to goodwill; it must be justified by a business valuation and represent the going concern value.
Goodwill is an eligible use of 7(a) loan proceeds in a business acquisition. The amount attributed to goodwill must be supported by a qualified, independent business valuation that establishes the fair market value of the business as a going concern. The SBA does not impose an arbitrary cap on the percentage of the loan for goodwill, as long as it's justified.
A $1,500,000 7(a) loan funds the acquisition of a service business. The business valuation apportions $300,000 to fixed assets and $1,200,000 to goodwill, which is 80% of the loan amount. This is acceptable as long as the valuation is sound and prudent lending standards are applied.
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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