Glossary · Reading the business
In short
This is the price at which a business would change hands between a willing buyer and a willing seller, with both having reasonable knowledge of relevant facts and neither being under compulsion to buy or sell. It’s what the business is truly worth.
For SBA 7(a) loans over $500,000, an independent business appraisal is typically required to determine the fair market value. This ensures the loan amount is justified by the asset's value and prevents over-lending. As a buyer, this appraisal provides a third-party validation of the deal price.
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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