Glossary · Reading the business
Valuation report
In short
A formal document from an independent appraiser that estimates the fair market value of the business you intend to buy. For an SBA loan, it's often a mandatory document to justify the purchase price.
What it means in a deal
The SBA requires a valuation report if the total financing amount (including any seller notes) exceeds $500,000, or if there's a perceived close relationship between you and the seller. Review this report carefully to understand the methodologies used, the underlying assumptions, and any adjustments made to the business's financial statements.
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
Common questions about Valuation report
- How thoroughly does the SBA review the business valuation report provided by the lender?
- What is the typical timeframe for a business valuation report when applying for an SBA 7(a) loan?
- When is a business valuation report required for a 7(a) change of ownership transaction, and who must perform it?
- What happens if a required environmental report (Phase I ESA) identifies potential contamination?
- What if my personal credit report shows a minor collection from several years ago?
- What if the lender requires additional environmental due diligence beyond a Phase I report?
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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