For SBA lenders
Short answer
A business valuation (appraisal) by a qualified, independent appraiser is required for all change of ownership transactions where the loan amount exceeds $500,000.
SBA requires a business valuation for acquisition loans over $500,000 to determine if the purchase price is reasonable and to assess the value of goodwill. This valuation must be performed by an independent, qualified source and conform to generally accepted appraisal standards.
A borrower is acquiring a business for $750,000, requiring a $600,000 7(a) loan. The lender instructs the borrower to engage a qualified, independent business appraiser to conduct a valuation, as the loan amount exceeds $500,000.
Insider move
Lenders must ensure the appraiser is qualified, independent, and that the report conforms to SBA requirements. The valuation's conclusion on purchase price reasonableness directly impacts the lender's underwriting decision and the SBA guaranty.
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.
More on change-of-ownership underwriting
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