SBA loan basics
Short answer
If a business valuation comes in lower than the purchase price, the buyer, seller, and lender must address the shortfall, often by renegotiating the price or increasing the buyer's equity injection.
For business acquisitions, the SBA requires an independent valuation for loans exceeding $500,000 to ensure the purchase price is reasonable. If the valuation is less than the proposed purchase price, the SBA loan amount cannot exceed the appraised value. The difference must be covered by the buyer's additional equity injection or a reduction in the purchase price by the seller. The SBA will not finance 'overpaying' for a business.
A business is listed for $1,000,000. The independent valuation comes back at $900,000. To close the deal, the buyer must either inject an additional $100,000 in cash, the seller must reduce the price to $900,000, or a combination of both.
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 7(a) Loans Overview
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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