Glossary · Reading the business
Independent valuation
In short
A professional appraiser's objective assessment of a business's fair market value. Lenders require this to ensure the purchase price is reasonable for the assets and cash flow.
What it means in a deal
For most 7(a) acquisitions, the lender will order an independent valuation to confirm the business is worth at least the loan amount. This report helps justify the purchase price and ensures the bank isn't over-lending. Pay attention to the valuation's assumptions; they directly impact the numbers.
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 valuation
- When is an independent business valuation required for a partner buyout?
- How long does an independent business valuation typically take for a $1.5 million acquisition?
- When is an independent business valuation mandatory for a 7(a) change of ownership loan?
- What type of independent valuation is required for non-cash assets to count as equity injection?
- When is an independent business valuation required for an SBA 7(a) acquisition, especially for related party transactions?
- When must a lender obtain an independent business valuation for a change-of-ownership between $250,000 and $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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