SBA 7(a) Q&A
Short answer
No, the SBA does not impose a maximum percentage of a 7(a) loan that can be specifically allocated to financing goodwill in a business acquisition.
The SBA's focus is on the overall reasonableness of the business acquisition's purchase price and the business's ability to repay the loan. As long as the total purchase price, including any amount attributed to goodwill, is supported by a comprehensive independent business valuation, the SBA does not set an arbitrary limit on the percentage of the loan that can be attributed to goodwill.
If a business is valued at $1,000,000 and has only $100,000 in tangible assets, meaning $900,000 is goodwill, an SBA 7(a) loan can still be used to finance this acquisition, provided the valuation is sound and the business's cash flow supports the debt service.
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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