We are a qualified source of business valuations for SBA and have completed hundreds of
SBA valuations. We specialize in valuing small, owner-operated businesses with annual
sales of less than $5 million. Over 60% of our valuations are related to the buying or
selling of a business, and are used to make critical decisions like: whether to buy or sell,
how much to offer or accept, and how much to lend. In these situations, valuations must
be realistic and reasonable to be of any value.
The primary purpose of a business valuation for a SBA loan is to independently determine
if the acquisition price of a business is reasonable. SBA valuations are different. They
must focus on the historical performance of a business with its current owner(s) NOT the
buyer's projections. They must meet the requirements of SBA's current Standard Operating
Procedures (SOP), so the appraiser must be familiar with the SOP. The appraiser must be a
qualified source, and be engaged and paid directly by the lender to ensure independence.
SBA valuations generally involve the sale of the assets of a business in a change of
ownership, so the valuation must be performed under those assumptions.
Small, owner-operated businesses are different than larger companies. Obviously, they
are smaller (revenue, assets, employees, locations, territories, etc.) and they operate
according to a unique agenda set by their owner(s). Although general valuation concepts
and theories still apply, the data and methods used must be relevant and adapted to
accurately value a small business. Unfortunately, many valuation firms apply the same
data and methods they use for larger companies.
How to Tell if a SBA Business Valuation is Done Right
• Is it performed & signed by an experienced CPA who is Accredited and/or
Certified in Business Valuation, and has lots of valuation experience?
• Is it performed by a firm that specializes in valuing small businesses?
• Does it follow the Statement on Standards for Valuation Services (SSVS)
published by the American Institute of CPAs?
• Does it apply methods from all 3 valuation approaches - market, income & asset
• After reviewing the report, do you understand what was done and why? Does it
• Is it based on reliable data from privately owned businesses, NOT large public
companies that have nothing in common with small, owner-operated businesses
• Is it based on actual business results NOT unreliable, low-quality projections
prepared just for the valuation?
• Does it use a “real-world” small business buyer’s perspective, NOT a mythical
• Does it provide a realistic, reasonable value?
• Is it reasonably priced - what good is it if you can’t afford it?