SBA 7(a) Q&A
Short answer
Acceptable valuation methods for goodwill in an SBA acquisition typically include the income approach (e.g., discounted cash flow) and market approach (e.g., comparable sales). The appraiser uses these methods to determine the fair market value of the overall business, from which goodwill is derived.
The SBA requires business valuations to be performed by qualified independent appraisers who use generally accepted valuation methodologies. While goodwill itself isn't directly valued in isolation, it's the residual value when the tangible and identifiable intangible assets are subtracted from the total fair market value of the business.
An independent appraiser valuing a $1,500,000 business acquisition might use a multiple of earnings (income approach) to determine enterprise value, then subtract the appraised value of fixed assets, inventory, and other identifiable intangibles to arrive at the goodwill value.
Insider move
Lenders rely on the independent appraiser's expertise to apply appropriate valuation methods. They want assurance that the goodwill component of a business acquisition is reasonable and supportable, given its inherent lack of liquidation value as collateral.
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.
More on goodwill financing
Terms in this answer
Pre-qualify your SBA 7(a) deal
Tell us the business, the price, and where you are — we'll point you to the lenders most likely to fund a deal like yours and flag anything that trips up approval.
Free · No documents · Usually same-day