SBA 7(a) Q&A
Short answer
Yes, an SBA 7(a) loan can finance a business acquisition where goodwill constitutes a significant portion, even 80%, of the $700,000 purchase price, as long as the total project cost is reasonable.
The SBA permits the financing of goodwill in business acquisitions and does not impose a specific percentage limit on goodwill relative to the total project cost. The key is that the overall purchase price, including goodwill, must be reasonable and supported by a business valuation from a qualified independent source, especially for larger transactions.
For a $700,000 business acquisition where $560,000 (80%) is allocated to goodwill, an SBA 7(a) loan can be used, provided an independent business appraisal supports this valuation and the borrower meets other eligibility and equity injection requirements.
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 2026-06-14. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-14 · SBA sources checked through 2026-06-14. 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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