Glossary · Reading the business
Net book value
In short
This is the value of an asset or a company's total assets less its liabilities, as recorded on its balance sheet. It reflects historical cost less accumulated depreciation, not necessarily market value.
What it means in a deal
When evaluating a business, the net book value of its assets (like equipment or real estate) is important but often differs from fair market value. For an SBA loan, collateral is typically valued at fair market value for the collateral analysis, not net book value. Understand the difference: book value is an accounting concept, market value is what it's actually worth today.
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 Net book value
- What is the specific personal net worth threshold that triggers a personal guaranty requirement for an owner?
- Can I use an SBA 7(a) loan to purchase a business with a negative net worth?
- Can an SBA 7(a) loan be used to purchase a business with a negative net worth?
- Can an SBA 7(a) loan be used to purchase a business with a negative tangible net worth?
- What if my business has a negative net worth? Can I still get an SBA 7(a) loan?
- What is the maximum net worth requirement for a business to qualify as "small" for a 7(a) loan?
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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