SBA loan basics
Short answer
Collateral, especially real estate, is typically valued by an independent, third-party appraisal. Other assets like equipment or inventory might be valued through professional appraisals or other acceptable methods.
The SBA requires independent, objective valuations for significant collateral to ensure accurate assessment of its worth. Real estate appraisals must conform to USPAP (Uniform Standards of Professional Appraisal Practice), while other asset valuations may follow industry-standard practices.
For a business acquiring a building, the lender will commission a commercial real estate appraisal. For specialized manufacturing equipment, they might require an equipment appraisal by a certified appraiser to determine its fair market value.
Insider move
Lenders must ensure appraisals are conducted by qualified, independent professionals and that the valuations are reasonable and support the collateral position. Incorrect or biased valuations can lead to issues with the SBA guarantee.
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.
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