Glossary · Reading the business
In short
An objective, professional assessment of a business's fair market value. Lenders typically require this for SBA loans to justify the purchase price.
For SBA 7(a) loans over $250,000 (and sometimes for smaller amounts if collateral is a concern), your lender will mandate an independent business appraisal. This appraisal must validate the purchase price and confirm the business's value, which is crucial for the underwriting process. If the appraisal comes in lower than the agreed price, you may need to renegotiate or increase your equity injection.
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Defined by DealRoom.so SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
Pressure-test the numbers before you make an offer
Send us the asking price and the seller's cash flow — we'll show whether the deal services SBA debt and where the add-backs are likely to hold up.
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