Glossary · Reading the business
Valuation(Business valuation)
In short
The process of determining the economic value of a business. For a buyer, a strong valuation justifies the purchase price and supports the SBA loan amount.
What it means in a deal
For SBA loans over $250,000, an independent business appraisal is required. This valuation ensures the purchase price is fair and provides the lender with confidence in the asset's underlying value. Understand the valuation methods used, like SDE or EBITDA multiples, to challenge or confirm the 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 Valuation
- When is an independent business valuation required for a partner buyout?
- What valuation methods are acceptable for assessing goodwill in an SBA acquisition?
- What if the business valuation is insufficient to support the purchase price?
- What is the importance of a professional business valuation for an acquisition?
- Is a separate business valuation required for an SBA 7(a) acquisition loan?
- What happens if my business valuation comes in lower than the purchase price?
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.
Pressure-test the numbers before you make an offer
Send us the asking price and the seller's cash flow — we'll show whether the deal services SBA debt and where the add-backs are likely to hold up.
Free · No documents · Usually same-day
Backed by data on 1,000+ SBA lenders and 300,000+ funded deals. Your details go only to lending partners you ask to be matched with — never sold to advertisers.