Glossary · The loan itself
Loan-to-Value(LTV)
In short
A ratio comparing the loan amount to the value of an asset, typically real estate. While less common for business loans, it can apply if the deal includes significant owner-occupied commercial real estate.
What it means in a deal
For an SBA 7(a) loan, LTV primarily matters if you're acquiring commercial real estate as part of the business. Lenders use it to assess risk; a lower LTV means more equity in the asset. Understand how the real estate appraisal impacts the loan structure and your required down payment.
Official sources
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Loan-to-Value
- Can the fair market value of raw materials I contribute to the acquired business count towards equity?
- How is the value of inventory I own and contribute to the acquired business counted towards equity injection?
- Can the value of my existing personal vehicle, if contributed to the business, count towards the equity injection?
- Can the value of equipment I already own and contribute to the acquired business count towards my equity injection?
- What is the maximum percentage of a business acquisition's value that can be attributed to goodwill for an SBA 7(a) loan?
- Can the fair market value of equipment I already own and contribute to the acquired business count towards my equity?
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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