SBA 7(a) Q&A
Short answer
An independent business valuation is required for any partner buyout where the amount being financed exceeds $500,000.
The SBA mandates an independent business valuation by a qualified appraiser for all changes of ownership, including partner buyouts, when the total loan amount (including any seller notes that are not on full standby) is greater than $500,000. This ensures the purchase price reflects fair market value.
If a partner is buying out a 50% stake in a business for $600,000, an independent valuation is mandatory. However, if the buyout amount was $450,000, the lender could potentially use internal valuation methods or a less formal appraisal.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-15 · SBA sources checked through 2026-06-15. DealRoom analysis of the current SBA 7(a) rulebook for change-of-ownership / partner buyouts. 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 partner & owner buyout
Terms in this answer
This page answers “When is an independent business valuation required for a partner buyout?” for SBA 7(a) business buyers — a short answer, the detail, and official sources — from DealRoom.so SBA Intelligence. It is general information, not legal, tax, or financial advice, and DealRoom is not a lender.
Source: DealRoom.so SBA Intelligence, based on public SBA, lender, franchise, FDIC, and related records. DealRoom is not a lender and does not guarantee financing.
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