SBA 7(a) Q&A
Short answer
Lenders rely on a professional business valuation, often conducted by an independent third party, to determine the value of goodwill in an acquisition.
For business acquisitions, the SBA requires a professional valuation to determine the fair market value of the business. Goodwill is typically calculated as the residual value after subtracting the fair market value of all identifiable tangible and intangible assets from the total purchase price. This valuation uses recognized methods like the asset, income, and market approaches.
A business is being acquired for $1,500,000. An independent appraisal identifies $500,000 in tangible assets (equipment, inventory, real estate) and $200,000 in identifiable intangible assets (customer lists, trademarks). The remaining $800,000 of the purchase price would be attributed to goodwill.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
7(a) Loan Program — Terms, Conditions, and Eligibility
U.S. Small Business Administration · Official SBA source
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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