When a business is being bought, sold, or refinanced with an SBA-guaranteed loan, most commonly a 7(a) loan, the lender almost always requires an independent business valuation before the loan can move through underwriting. Not just any valuation will do; it has to meet the SBA's specific standards and be prepared by a qualified, independent appraiser. Sun Business Valuations delivers exactly that: bank-ready, standards-compliant valuations that keep your financing on track.
Sun Business Valuations, LLC specializes in business valuations for SBA lending. We are certified by the National Association of Certified Valuation Analysts (NACVA) and recognized as one of the top firms performing SBA loan valuations nationwide. Our in-house team of Certified Valuation Analysts (CVAs) works regularly with regional and national SBA lenders and their clients, delivering the quality, cost-effective, and timely appraisals that underwriting demands.
When Is an SBA Business Valuation Required?
Not every SBA loan triggers an independent valuation — but many do, and knowing where you stand early can save weeks in the financing process. Generally, a business valuation is required when SBA 7(a) loan proceeds are used to finance a change of ownership, such as buying a business outright or buying out an existing owner's interest.
Under current SBA Standard Operating Procedures ([SOP 50 10 8, effective 6/1/25), an independent business valuation from a qualified source is required when:
- The amount being financed — including the SBA loan, seller financing, and other sources — minus the appraised value of real estate and equipment exceeds $250,000 (the “goodwill” or intangible portion of the deal);
- There is a close relationship between buyer and seller: for example, transactions between family members, business partners, or an employer and employee — regardless of the dollar amount; or
- The lender's internal policies require an independent valuation.
USPAP-Compliant Reports for SBA Lending
SBA loan valuations carry a requirement that many business owners don't realize until a lender raises it: the report must comply with the Uniform Standards of Professional Appraisal Practice (USPAP), the professional benchmark that governs how a compliant appraisal is prepared and documented.
Sun ensures that our SBA valuation reports comply with USPAP and stands behind that compliance. Our appraisers maintain their credentials through ongoing USPAP education — a rigorous, multi-hour recertification course required to hold senior appraisal accreditation — so the standards behind your report are current, not assumed. That means when your valuation reaches the lender's desk, it is built to satisfy the requirements the SBA and the bank are checking for.
Who Qualifies to Perform an SBA Valuation
The SBA doesn't accept a valuation from just anyone. It must come from a “qualified source,” an appraiser who regularly performs business valuations for compensation and holds a recognized professional credential such as the Certified Valuation Analyst (CVA) or Accredited Senior Appraiser (ASA). Sun's professionals hold these credentials, placing us squarely within the SBA's definition of a qualified source.
Equally important is independence. The appraiser cannot have a financial interest in the outcome of the transaction, which is why the deal's broker or the lender's own staff generally can't provide the valuation. In practice, the SBA requires the lender, not the borrower or seller, to engage the appraiser, and the report is prepared for and addressed to the lender. This independence is precisely what gives an SBA valuation its credibility.
Why a Broker's Opinion Isn't Enough
If you're buying or selling a business, you may already have a broker's opinion of value in hand. It's a common and useful document, but it's important to understand what it is and isn't. A broker's opinion is typically prepared as marketing material to help sell a business. It is not an independent, standards-compliant appraisal, and it will not satisfy an SBA lender's underwriting requirements.
Many people intuitively sense this, but it's worth stating plainly: to fund an SBA loan, the bank needs an independent business valuation from a qualified appraiser, not a broker's estimate. Sun provides exactly that kind of report, prepared to the standards lenders rely on.
Accepted Methods and Standards
We prepare SBA valuations using the most widely accepted methods and standards, considering the income, market, and asset approaches and reconciling them into a defensible conclusion consistent with professional standards and IRS Revenue Ruling 59-60. Our certified analysts have worked with a wide variety of small businesses across the country and across industries. That depth of experience enables us to complete Small Business Administration (SBA) loan appraisals efficiently and accurately, quickly identifying a business's risk profile and financial nuances without sacrificing rigor.
What to Expect: Our SBA Valuation Process
We've streamlined our SBA engagements around what lenders and borrowers need — speed, clarity, and a report that clears underwriting the first time. Here's how a typical engagement unfolds:
- Engagement and scope. The lender engages us, and we confirm the scope of work, including whether the transaction is an asset purchase or a stock purchase, and what's included in the sale.
- Information gathering. We request the financial statements, tax returns, and operational details needed to understand the business. (See the document checklist below.)
- Analysis and recasting. We analyze the financials, make appropriate recasting adjustments for items like owner benefits and non-recurring expenses, and assess the industry and risk factors that drive value.
- Application of valuation approaches. We apply the relevant income, market, and asset approaches and reconcile them into a supported conclusion of value.
- Report delivery. We deliver a USPAP-compliant report addressed to the lender, with the conclusion of value, supporting analysis, and required certifications — ready for underwriting.
Information We'll Typically Need
Having the right documents ready up front is the single biggest factor in a fast turnaround. For most SBA engagements, we'll request:
- Business financial statements and/or federal tax returns
- Interim financial statements for the current year, if available
- A copy of the purchase agreement or letter of intent, if one exists
- Details on assets included in the sale (equipment, inventory, real estate)
- Information about the business's operations, customers, and industry
Timing That Keeps Your Loan Moving
Timing is a top concern for SBA clients: a valuation delay can hold up an entire loan. We understand where our report sits in the underwriting timeline and treat it accordingly. Sun strives to complete SBA business valuation engagements within 10 to 15 business days of receiving the required information, and when special circumstances demand a faster turnaround, we do what it takes to meet the deadline.
Trusted by Lenders and Borrowers Alike
Regional and national SBA lenders return to Sun because our reports clear underwriting without friction. Borrowers value that we make a bank-required business appraisal straightforward. Whether you're a lender who needs a reliable valuation partner or a business owner navigating the financing process for the first time, our team delivers a report you can count on.
Because obtaining SBA financing is often part of a larger transaction, buying a business, or buying out a partner, the timing and purpose of your valuation matter. In many cases, a single valuation can serve more than one goal: a report prepared for a partner buyout, for instance, can also be structured to satisfy SBA financing requirements, so you get added value from one engagement.
Frequently Asked Questions
It depends.. A valuation is generally required when the loan finances a change of ownership and the intangible (goodwill) portion of the deal exceeds the SBA's threshold, or when the buyer and seller are closely related. If you're unsure whether your transaction crosses that line, a brief conversation can usually clarify it.
Under SBA rules, the lender must engage the appraiser, and the report is prepared for and addressed to the lender. A broker may recommend an appraiser, but the valuation can't be one commissioned by the buyer or seller. This protects the independence the SBA requires.
No. A broker's opinion is marketing material, not an independent, USPAP-compliant appraisal from a qualified source, and it won't satisfy SBA underwriting.
Sun strives to complete SBA engagements within 10 to 15 business days of receiving all required information, with faster turnaround when circumstances require it.
Fees depend on the size and complexity of the business and the specifics of the transaction. Sun provides cost-effective, competitively priced valuations and will give you a clear quote up front.
Yes. Our SBA valuation reports are prepared in compliance with USPAP, and our appraisers maintain current USPAP credentials through ongoing recertification.
Ready To Discuss Your Business Valuation Needs?
To discuss your situation and receive information about the business valuation process, time frame, and cost, please call Stephen Goldberg, Managing Partner, at 800.232.0180 or complete this form, and we will get back to you shortly.
