For banks

SBA 7(a) Business Valuation

An SBA 7(a) business valuation is the independent valuation SBA requires in a change-of-ownership loan file. FMV prepares it to SOP 50 10 8.1, addresses it only to the lender, and signs it in two business days from complete documents.

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At a glance

Basis: SBA SOP 50 10 8.1, Appendix 15, effective October 1, 2026
Prepared by: A credentialed FMV valuation analyst
Deliverable: Signed report (PDF)
Used by: Banks and lenders, accounting firms
Delivered to: The ordering bank's or firm's vault and the client's vault

When it is needed

An initial acquisition, business expansion, owner buyout, or ESOP transaction financed with a 7(a) loan.
A partial change of ownership where at least one existing owner remains and guarantees the loan.
A conventional or 504 acquisition where credit policy calls for the same independent standard.

What the report contains

Statement of engagement, purpose, and independence
Standard and premise of value under Revenue Ruling 59-60
Company, industry, and economic overview
Financial analysis with normalized earnings (SDE or EBITDA)
Income, market, and asset approaches, reconciled
Conclusion of value with goodwill allocation
Appraiser qualifications, signature, and full exhibits

Last updated October 24, 2026

The FMV Lender Standard

Included in every bank engagement at no additional cost.

Peer benchmark exhibit

The borrower against private companies of its size on margins, leverage, debt service coverage, and working capital.

Annual reassessment

Twelve months after the valuation, we re-run it on the borrower's latest financials and send credit administration an updated assessment for the annual review.

Public-record screen

Suits, liens, judgments, and bankruptcies on the business, flagged for follow-up.

Guaranty support

If SBA questions our valuation at guaranty purchase, we provide a support memo, the workfile, and time with your team or SBA reviewers.

Industry research

Industry analysis in each report, with research access for credit administration and loan review.

How the Lender Standard works

Who uses it

Banks and lendersWe are engaged by the lender, and the report is addressed only to the lender, as Appendix 15 requires. Every engagement includes the FMV Lender Standard.Accounting firmsWhen a client is buying or selling with SBA financing, refer the valuation through FMV Advisor and track it to delivery. The lender remains the addressee.

Standards and sources

SBA SOP 50 10 8.1, Appendix 15: Independent, lender-addressed valuation on every change of ownership. No calculation engagements.
Qualified Source credentials: ABV, CVA, ASA, AVA, or CBA
Revenue Ruling 59-60: Fair market value, going concern
AICPA SSVS (VS Section 100): Development and reporting standards

Documents we need

Target financial statements and tax returns, three years
Year-to-date interim financials
Letter of intent or purchase agreement
Asset or stock purchase terms, and any assumed debt

How an engagement works

Scope
We confirm the purpose, standard of value, valuation date, and addressee, then issue the engagement letter.
Intake
You or your client upload documents against a checklist. Open items stay visible until the file is complete.
Analysis
A credentialed analyst prepares the valuation and signs the conclusion.
Delivery
The signed PDF goes to your vault and your client's. We keep the workfile for later questions.

SBA 7(a) business valuation questions

When does SBA require an independent business valuation?

SBA SOP 50 10 8.1, effective October 1, 2026, requires an independent business valuation from a Qualified Source on every 7(a) change-of-ownership transaction. When the business purchase price is $350,000 or less and the buyer and seller have no close relationship, the lender may use its own internal valuation instead.

Who can prepare an SBA 7(a) business valuation?

An SBA 7(a) business valuation must come from a Qualified Source: an independent appraiser holding a recognized business valuation credential, such as ABV, CVA, or ASA, engaged by the lender. The FairMarketValue (FMV) valuation team holds the CFA, CPA, ABV, and CVA credentials.

Can an SBA business valuation be addressed to both the lender and the borrower?

No. SOP 50 10 8.1 requires the valuation to be requested by and prepared for the lender, and SBA does not accept a report co-addressed to the borrower or prepared as a calculation engagement.

How long does an FMV SBA 7(a) business valuation take?

FMV signs SBA 7(a) business valuations in two business days from complete documents.

Can FMV also order the Quality of Earnings report and the appraisals?

Yes. SOP 50 10 8.1 requires a Quality of Earnings report for initial acquisitions and business expansions with a purchase price of $3 million or more. Partner accounting firms perform and sign it. Appraisers in FMV's network sign the real estate and equipment appraisals. FMV orders and bills all of them with the valuation.

What does FMV provide if SBA questions the valuation at guaranty purchase?

FMV provides guaranty support as part of the FMV Lender Standard: a written support memo, the workfile, and time with the lender's team or SBA reviewers. It covers FMV's own work, not the lender's underwriting, and it is not an indemnity.

How is the fee for an SBA 7(a) business valuation set?

FMV quotes the fee for an SBA 7(a) business valuation after reviewing the scope. The fee is fixed before work starts and does not depend on the conclusion of value.