For SBA lenders
Short answer
Lenders require comprehensive documentation from the seller, including historical financial statements, tax returns, and asset lists to properly underwrite a change-of-ownership transaction.
For a change-of-ownership, lenders must obtain a minimum of three years of federal tax returns and year-end financial statements (including balance sheets and income statements) for the selling business. Interim financial statements are also required if the latest tax return is more than 180 days old. This documentation is crucial for validating historical cash flow, asset valuations, and business viability.
For a $1,000,000 acquisition, the lender requires the seller's business tax returns and financial statements for the past three fiscal years (e.g., 2021, 2022, 2023) and interim financials through Q1 2024 to assess historical performance and project future cash flow.
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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