SBA 7(a) Q&A
Short answer
There is no specific maximum percentage of goodwill that an SBA 7(a) loan can finance relative to the total project cost; the loan can finance 100% of the goodwill if the business valuation supports it.
The SBA does not set an explicit cap on the percentage of goodwill that can be financed in a business acquisition. The key is that the overall purchase price, including any goodwill, must be supported by an independent business valuation. If the valuation justifies the purchase price, the SBA loan can finance the entire acquisition, including substantial goodwill.
A buyer acquires a service business for $800,000. The tangible assets are valued at $100,000, meaning goodwill is $700,000. If an independent appraisal supports the $800,000 purchase price, the SBA 7(a) loan can finance the full $700,000 of goodwill, assuming other eligibility criteria are met.
Insider move
Lenders critically evaluate the business valuation, especially when goodwill is a major component, to ensure the purchase price is reasonable. They look for strong historical cash flow and buyer experience to justify the intangible asset value.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
Last checked 2026-06-13. 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.
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