SBA 7(a) Q&A
Short answer
The SBA requires an independent business valuation for acquisitions over $500,000, which evaluates the purchase price's reasonableness, including the goodwill component.
For business acquisitions, especially those with significant intangible assets like goodwill, the SBA requires a qualified independent business valuation. This valuation assesses the fair market value of the business, justifying the purchase price and ensuring that the amount financed through the SBA loan is reasonable and prudent.
A buyer is acquiring a marketing agency for $1,200,000, where $800,000 is attributed to goodwill. An independent appraiser conducts a valuation, confirming that the $1,200,000 purchase price, including the goodwill component, represents fair market value.
Insider move
Lenders rely heavily on the independent valuation to ensure the purchase price is justified. They scrutinize the appraiser's methodology and findings, especially for businesses with high goodwill, to mitigate risks associated with overvalued acquisitions.
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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