Many times borrowers and bankers have questions concerning SBA business valuations for their SBA 7(a) loans.  The attached slides from a presentation made June 19, 2017 clearly summarize the rules and best practices as applicable to SBA appraisals and loans.

Powerpoint Slides, SBA Fundamentals of Business Valuation

I will cover in more detail when an SBA business valuation is required and who may perform an SBA business valuation below.

When is a Third Party SBA business valuation or SBA business appraisal required?

A third party business valuation is required when the goodwill loan amount is greater than $250,000.  This is defined as the total business value less equipment at tax book value (unless and equipment valuation is performed) and real estate.

It is also required if bank policy requires it on smaller loan or if the parties are related as being either relatives or related through the business, i.e. owner to manager, transfer between partners, etc.

Want to know more?  Please click here for the downloadable e-book. “7 Things You Must Know Before You Order a Business Valuation” 

Who must perform the Business Valuation?

A “qualified source” must perform the valuation.  A “qualified source” is an individual who regularly receives compensation for business valuations and is accredited by one of the following recognized organizations:

  1. Accredited Senior Appraiser (ASA) accredited through the American Society of Appraisers;


  1. Certified Business Appraiser (CBA) accredited through the Institute of Business Appraisers;


  1. Accredited in Business Valuation (ABV) accredited through the American Institute of Certified Public Accountants;


  1. Certified Valuation Analyst (CVA) accredited through the National Association of Certified Valuation Analysts; and


A new change to the SOP in 2014 is that a CPA without one of the credentials listed above is not considered a qualified source.

Want to know more?  Please click here for the downloadable e-book. “7 Things You Must Know Before You Order a Business Valuation” 

SBA Business Valuation questions?  Contact Greg Caruso at Harvest Business Advisors.

Clients choose Harvest Business Advisors for our accurate business valuations and our consistent ability to deliver a high price as part of a smooth exit transaction.
Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia.
Connect with us at or 443.334.8000 to discuss selling your business, ordering a business valuation or buying a business.