SBA 7(a) Q&A
Short answer
If the independent business appraisal comes in lower than the agreed-upon purchase price, the buyer, seller, and lender must re-evaluate the deal. Often, the purchase price must be renegotiated down to the appraised value.
For an acquisition loan, the SBA requires the purchase price to be supported by a professional valuation. If the valuation is lower, the lender can only finance up to the appraised value. The buyer must either reduce the offer, increase their cash equity, or the deal may fall through.
A business is under contract for $1,000,000. The SBA-required appraisal values it at $850,000. The lender will only finance based on the $850,000 value, requiring the buyer to either increase their equity or renegotiate the purchase price.
Insider move
Lenders must ensure the purchase price is justified by the independent valuation to protect against over-financing and to comply with SBA regulations. They will not fund a loan where the purchase price exceeds the appraised value unless the buyer makes up the difference in cash.
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.
Terms in this answer
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