Business Valuation for an SBA Loan: Cost, Requirements and Who Can Perform It

Short answer: An SBA 7(a) change of ownership requires an independent business valuation from a Qualified Source once the goodwill or intangible portion of the deal exceeds $250,000, and the lender must engage the appraiser directly. A valuation prepared for you or for the seller cannot be used. Nobody publishes an average price, but published fee ladders for the adjacent report run from about $1,900 on a business under $500,000 of revenue to $3,900 above $10,000,000, on a two to three week turnaround. The borrower normally pays for it. Last updated September 2026. Educational only, not lending, tax or legal advice.

Why the SBA makes you buy a valuation at all

A bank lending against a business it cannot repossess needs someone independent to say what the business is worth. That is the whole logic. On a change of ownership the collateral is mostly intangible, so the SBA rulebook substitutes an outside opinion for the hard assets a normal secured loan would rely on. It is the same instinct that produced the appraisal requirement on a mortgage, applied to something much harder to value.

The requirement sits in SOP 50 10 8, effective 1 June 2025. The SBA does not publish the SOP in a form that automated tools can read, so the most reliable public reading of it comes from the valuation profession. Writing in QuickRead on 22 October 2025, Daniel R. Basch, CPA, ABV, CVA, MBA, set out the test: for a non special purpose business an independent valuation becomes necessary when the goodwill or intangible portion exceeds $250,000, or if the buyer and seller have a close relationship. At or below that figure, in his reading, the lender may perform its own valuation analysis in house.

BGH Valuation states the same threshold from the lender-facing side and words it as a calculation rather than a category: a valuation is needed if the amount being financed, including any 7(a), 504, seller or other financing, minus the appraised value of real estate or equipment, is greater than $250,000. Those two formulations arrive at the same place. What is being tested is the part of the price that is not backed by something you could sell.

Who is allowed to perform an SBA business valuation?

Not your accountant, unless your accountant happens to hold one of five specific accreditations. The SOP names them, and the list is short:

• ASA, Accredited Senior Appraiser
• CBA, Certified Business Appraiser
• ABV, Accredited in Business Valuation
• CVA, Certified Valuation Analyst
• BCA, Business Certified Appraiser

There is a second condition that trips up more deals than the credential list, and it is the one to raise with your lender in the first conversation. The valuation must be engaged by the lender and prepared for the lender. A report you commissioned yourself, however well credentialed the author, does not satisfy the file. Neither does one the seller ordered before going to market, which is a common and expensive discovery: sellers frequently arrive with a valuation in hand, and it is useful as a negotiating document and useless as a loan document.

How much does a business valuation cost for an SBA loan?

No US professional body publishes an average, and most valuation firms quote rather than post. The figures that circulate on lending blogs, usually $1,500 to $5,000 or $3,000 to $10,000, do not trace back to anyone who publishes a price. What we could verify firsthand on 1 September 2026 is below. Two firms publish something, one publishes nothing, and the cheapest published number in the market turns out not to be for this purpose at all.

The Simply Business Valuation row is the useful one, and not for the reason it looks. A $399 report is roughly a fifth of the cheapest published SBA-adjacent figure, and the reason is purpose, not quality. A 409A or Form 5500 valuation answers a different question for a different reader under different standards. If you go shopping on price alone you will find that number, buy it, and then discover it does not clear the loan file. Ask any provider one question before you pay: will this report be engaged by my lender and prepared for the lender under SOP 50 10 8. If the answer is anything other than yes, it is the wrong report.

Budget the valuation as one line in a closing stack rather than as a standalone cost. On a change of ownership you are also likely to be paying for legal drafting, lien and title work, and possibly a quality of earnings engagement. Our breakdown of what a quality of earnings report costs covers the largest of those, and the same rule applies to both: the report has to be prepared for the lender.

Does every SBA acquisition need one?

Under the $250,000 intangible threshold, the lender may do its own analysis, so a genuinely asset-heavy purchase can avoid the outside report. In practice that exemption almost never helps a software buyer. Strip the appraised value of real estate and equipment out of a SaaS acquisition and what is left is nearly the entire price, because there is no real estate and the equipment is a few laptops. A $400,000 software business will clear the threshold comfortably. A $400,000 machine shop might not.

The close relationship test catches the other common case. If you are buying from a family member, a business partner or an entity you already have an interest in, the threshold stops mattering and an independent valuation is required regardless of size. That makes the valuation unavoidable on a partner buyout, which is otherwise the most lightly treated change of ownership in the SBA rulebook. That rule exists because a price between related parties is not evidence of anything, and lenders have seen the alternative.

One caveat on the threshold itself, because the public commentary does not agree. Basch's October 2025 reading of SOP 50 10 8 keeps the $250,000 in-house tier intact. Some 2026 lender and advisory commentary states that the newer SOP 50 10 8.1 removes it and requires a Qualified Source valuation on every change of ownership regardless of size. We could not confirm that against a primary source, because the SBA does not publish the SOP in a machine readable form, so we are recording the disagreement rather than picking a side. If your deal sits near $250,000 of intangible value, the safe assumption is that you will be buying the report, and the person who can settle it in one sentence is the lender underwriting your file.

What changes on 1 October 2026

SOP 50 10 8.1 applies to applications issued an SBA loan number on or after 1 October 2026, and it adds a second mandatory report above a size threshold. Where the purchase price is $3,000,000 or more, measured before buyer equity or seller debt, a Quality of Earnings report becomes mandatory, it must be prepared for the lender, and it must contain a Cash Proof. That is separate from the valuation and it does not replace it. Above $3M you are buying both.

The date that governs is the date the lender is issued a loan number, not the date you sign a letter of intent or the date you close. If your deal is near that line, ask your lender which rulebook they expect to close you under before you build a closing budget, because the two versions produce materially different cost stacks. The rest of the change of ownership requirements, including the equity injection and standby rules on seller notes, sit on our SBA loan to buy a business pillar.

How to read the valuation once you have it

Most buyers file the report and never open it, which wastes the one independent read on the business they will ever get for free. Three things in it are worth your time.

First, the earnings the appraiser actually used. A valuation of a small business is normally built on seller's discretionary earnings or adjusted EBITDA, and the adjustments are where the judgment lives. Compare the add-backs the appraiser accepted against the add-backs the seller claimed in the listing. A gap between the two is the most useful single number in the report, and it is the number your offer should have been built on.

Second, the multiple and where it came from. If the report leans on transaction databases, note the date range and the size band, because a multiple drawn from deals twice the size of yours is not evidence about your deal. Our page on SaaS valuation multiples sets out what the published sources actually say and where the ranges come from.

Third, the concentration and dependency commentary. Appraisers write plainly about customer concentration and owner dependence because both affect the discount rate they apply, and that commentary is frequently blunter than anything your broker will say out loud. If you want a rough view before you commission anything, you can get an indicative valuation on the business in minutes and use it to sanity check the range you are negotiating in, then treat the formal report as the thing that has to satisfy the lender.

The valuation is not your purchase price allocation

These get confused constantly and they are separate documents doing separate jobs. The valuation establishes an independent enterprise value for the lender's file. The allocation splits the price you actually paid across seven asset classes for the IRS, on Form 8594, and it determines what you get to deduct and how fast. One is a lending requirement, the other is a tax filing that both you and the seller make.

They do interact, though, and in a way worth planning for. If your allocation schedule assigns values that contradict the independent valuation sitting in the same loan file, you have created an inconsistency across two documents about one transaction. Read the valuation before you finalize the schedule, and see purchase price allocation and Form 8594 for how the seven classes work and where the buyer and seller interests diverge.

Order it early

The single most common scheduling mistake on a first acquisition is treating the valuation as a closing item. Published turnarounds run from five business days on a rush to two or three weeks on a standard engagement, and that clock does not start until the lender engages the appraiser, which does not happen until your file is far enough along for them to want to spend money on it. Then the appraiser needs financials from a seller who may be slow.

Ask your lender in the first call when they order the valuation, who pays, and what the appraiser will need from the seller. Put that document request into your due diligence checklist so it goes to the seller in the same batch as everything else, rather than as a surprise ask six weeks later. The whole sequence, from first conversation to close, is laid out on our how to buy a business pillar.

Figures in this article were read firsthand on 1 September 2026 from the published pricing pages of Swift Valuation, BGH Valuation and Simply Business Valuation. The SOP 50 10 8 valuation threshold and the Qualified Source credential list are taken from Daniel R. Basch's 22 October 2025 QuickRead article, because the SBA does not publish the SOP in a machine readable form. Nothing here is lending, tax or legal advice, and requirements are applied by your lender rather than by this page.