SBA loan basics
Short answer
If a required business valuation comes in lower than the purchase price, the buyer or seller must adjust the deal terms, such as reducing the purchase price, increasing the buyer's equity injection, or utilizing seller financing on full standby.
The SBA requires that the loan amount not exceed the fair market value of the business being acquired. If the valuation is lower, the lender cannot finance the difference. This ensures the borrower is not overpaying and the loan is secured by adequate value. The deal must be restructured to bridge the gap.
A business is being purchased for $1.5 million, but the SBA-required valuation comes in at $1.3 million. The buyer might need to increase their down payment by $200,000, or the seller might agree to reduce the price or provide a $200,000 seller note on full standby.
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
SBA Document Search
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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