Glossary · Reading the business
Overvaluation
In short
When an asset or business is priced higher than its true fair market value. This is a major risk for a buyer and a red flag for lenders.
What it means in a deal
A third-party appraisal helps prevent overvaluation by providing an objective assessment. If an appraisal comes in significantly lower than the purchase price, you'll need to renegotiate with the seller or increase your equity injection to cover the difference. Lenders won't fund overvaluation.
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
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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