SBA Business Valuations
When performing a business valuation for SBA loan purposes, our conclusion of value is matched to the target deal structure. Specifically, is the deal an asset or a stock deal? What does the transaction include? What does it exclude? These details matter. Providing an equity value for a company that will be sold via an asset sale (and vice versa) can be misleading to both the lender and the borrower; stock deal values can differ materially from asset deal values. Our valuators take the time to review the terms of the proposed transaction and provide our SBA clients with an apples-to-apples determination of company value.
When working with SBA lenders, our goal is to provide both the lender and their borrower with a reliable value of the target company in order to support the lender’s decision on whether or not to make the loan, and the buyer’s decision that the business is worth the investment.
SBA Loan Financing
Certain SBA loan applications require a business appraisal as part of the loan package. Specifically, as stated in the SBA’s SOP 50 10 6, for any SBA-guaranteed business acquisition loan package, if either i) the amount to be financed is greater than $250,000 (excluding the appraised value of the real estate and equipment) or ii) the transaction is not considered arms-length, the SBA lender must obtain an independent business valuation from a qualified source. Our staff are Certified Business Appraisers through the IBA, an organization that is recognized as qualified by the SBA.
If you have questions or are in need of a business valuation for an SBA loan application, please feel free to contact us.
Related Article: SBA Business Valuation Guidelines In 2021