SBA Regulations and Certified Business Appraisals

The regulations related to SBA loan programs are found in "SOP50-10-(5B)”.  This document covers which covers 7(a) and 504 loan processing and has several paragraphs which address the role played by business valuation and business appraisers.

The changes that affect business appraisals are as follows:

• “If the amount being financed minus the appraised value of real estate and/or equipment is greater than $250,000 or if there is a close relationship between the buyer and seller, the lender must obtain an independent business valuation from a qualified source.”

•  A "qualified” source is a person who regularly receives compensation for business valuations and who is accredited by a recognized organization such as the Institute of Business Appraisers (IBA).
  

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