SBA 7(a) Q&A
Short answer
There is no specific maximum percentage of goodwill that an SBA 7(a) loan can finance, as long as the total project cost, including goodwill, is supported by a robust business valuation.
SBA 7(a) loans are commonly used to finance business acquisitions, which frequently involve significant goodwill. The SBA doesn't cap the percentage of goodwill, but rather focuses on ensuring the overall purchase price, including the goodwill component, is justified by an independent business valuation. The business's historical cash flow and future projections must be strong enough to support the debt service on the entire acquisition loan.
If you buy a service business for $1,500,000, and the tangible assets are valued at $300,000, then $1,200,000 (80%) of the purchase price is goodwill. An SBA 7(a) loan can finance this, provided a qualified appraisal supports the $1,500,000 valuation and the business's cash flow can cover the debt.
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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