Glossary · Reading the business
Independent Appraisal
In short
A professional valuation of the business performed by an unbiased third party. Lenders require this to ensure the purchase price is fair and the collateral covers the loan amount.
What it means in a deal
For an SBA 7(a) loan, an independent appraisal is mandatory for any business sale exceeding $250,000. The appraiser will assess the fair market value of the business, its assets, and sometimes real estate. You need to review this appraisal to ensure it aligns with your understanding of the business's value and supports the purchase price.
Official sources
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 Independent 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?
- When is an independent business appraisal required for a change of ownership transaction exceeding $500,000?
- Is an independent business appraisal required for a 7(a) loan financing a business acquisition with a purchase price exactly $500,000?
- When does the SBA require an independent business appraisal for a change-of-ownership if the loan amount is under $500,000?
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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