Glossary · Reading the business
Appraisal
In short
An appraisal is an expert's opinion on the value of an asset or business. For a buyer, it confirms the purchase price is reasonable and helps the lender assess collateral.
What it means in a deal
For an SBA 7(a) loan, an appraisal is often required for real estate or business assets being purchased, ensuring the loan amount aligns with the collateral's fair market value. You'll rely on a third-party appraiser to give an unbiased view, which the lender uses for underwriting.
Official sources
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.
Related terms
Common questions about Appraisal
- Is an independent appraisal always required when an acquisition includes significant goodwill?
- When is an independent appraisal required for non-real estate business assets being acquired?
- Does the SBA require an independent business appraisal for a business acquisition costing $400,000?
- Can an SBA 7(a) loan cover the cost of a business valuation or appraisal?
- When is a business appraisal required for a change of ownership transaction exceeding $500,000?
- When is a separate goodwill appraisal necessary for a business acquisition loan exceeding $1,000,000?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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