Glossary · Reading the business
In short
An independent, professional valuation of assets or the business itself by a qualified appraiser. It determines fair market value for financing.
For SBA 7(a) loans, a formal business valuation or appraisal is often required, especially for larger loans or when goodwill is a significant asset. The lender will order this, and you'll typically pay for it. The appraisal helps confirm the business's value, justifies the purchase price, and assesses collateral. Pay attention to the valuation methodology and assumptions.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
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.
Free · No documents · Usually same-day