SBA 7(a) Q&A
Short answer
An SBA 7(a) loan can finance up to 90% of a business acquisition, including significant goodwill, provided the buyer contributes the minimum 10% equity.
The SBA 7(a) program allows for financing of goodwill and other intangible assets as part of a business acquisition. The maximum loan-to-value (LTV) is typically 90%, meaning the buyer must provide a minimum 10% equity injection. There isn't a separate, lower percentage cap specifically for goodwill, as long as the business's overall value (including goodwill) is supported by a qualified appraisal and its cash flow justifies the debt.
A buyer acquires a software company for $1 million, where $700,000 is attributed to goodwill. An SBA 7(a) loan can finance $900,000 (90%) of the purchase, with the buyer providing $100,000 (10%) equity, given strong cash flow.
Insider move
Lenders focus on the business's ability to service the debt, especially when goodwill is a large component. They require a strong business valuation to justify the overall purchase price, ensuring the intangible assets are properly valued and the cash flow is sufficient.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
Last checked 2026-06-14. 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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