For SBA lenders
Short answer
An independent business appraisal is mandatory for a 7(a) loan financing a business acquisition when the total financing, including any seller debt, exceeds $500,000.
The SBA requires an independent business appraisal by a qualified, disinterested third-party appraiser whenever the amount being financed (including the 7(a) loan and any seller financing) for a change of ownership exceeds $500,000. This appraisal ensures the purchase price is reasonable and reflective of the business's fair market value.
A borrower is buying a business for $750,000, with a $600,000 SBA 7(a) loan and a $150,000 seller note. Since the total financing ($750,000) exceeds $500,000, an independent business appraisal is mandatory.
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.
More on change-of-ownership underwriting
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