SBA 7(a) Q&A
Short answer
If the valuation is significantly lower, the lender may require the buyer and seller to renegotiate the purchase price, increase the buyer's equity injection, or the loan may be declined.
The SBA requires the loan amount to be adequately justified by the value of the assets and goodwill being acquired. If the valuation is substantially below the purchase price, it indicates the buyer is overpaying, creating unacceptable risk for the lender and SBA.
A buyer agrees to purchase a business for $1.5 million, but the independent valuation comes in at $1.2 million. The lender might require the purchase price to be adjusted to $1.2 million, or the buyer to increase their cash injection by $300,000 to cover the difference.
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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