For SBA lenders
Short answer
An independent business valuation is required for change-of-ownership transactions when the loan amount exceeds $250,000, regardless of whether real estate is involved or the purchase price is below $500,000.
SBA policy generally requires an independent business valuation for change-of-ownership loans exceeding $250,000. This ensures the purchase price is reasonable and supported by the business's value, protecting the integrity of the loan and collateral. This requirement is distinct from real estate appraisals.
A lender is underwriting a $400,000 7(a) loan for a business acquisition. Even though the loan amount is under $500,000, it exceeds $250,000, so the lender must obtain an independent business valuation from a qualified appraiser to support the purchase price.
Lenders must ensure the valuation is performed by a qualified, independent appraiser and is current. An inadequate or missing valuation is a critical underwriting error that can result in a significant repair or denial of 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 2026-06-14. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-14 · SBA sources checked through 2026-06-14. 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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