For SBA lenders
Short answer
For loans exceeding $500,000 involving a change of ownership, an independent third-party business valuation is required.
SBA policy mandates that for business acquisition loans where the total financing (including any financed seller debt) is greater than $500,000, an independent business valuation performed by a qualified appraiser is necessary. This valuation helps determine the fair market value of the business and supports the reasonableness of the purchase price, protecting both the lender and the SBA's interest.
A borrower seeks a $750,000 SBA 7(a) loan to acquire an existing business. The lender must obtain a comprehensive business valuation report from a qualified, independent third-party appraiser to justify the purchase price.
Lenders must ensure the appraiser is independent and qualified, the valuation report is thorough, and the purchase price is justified by the valuation. If the valuation comes in significantly below the purchase price, the deal structure may need adjustment, or the loan may not be approved.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
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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