Website by 
Blog
For small business owners navigating a sale or acquisition involving SBA financing, understanding when a business valuation is required—and what’s expected—is critical. Whether you’re a buyer, seller, or lender, a compliant and defensible valuation isn’t just a formality; it’s a vital part of securing funding and protecting everyone involved.
At Strong Tower Valuations, we regularly help clients meet SBA standards with accurate, timely, and independent business valuations. In this article, we’ll break down:
- When an SBA valuation is required
- What the SBA expects in a valuation
- What’s included in a compliant valuation
- Why lenders and borrowers trust valuation professionals like us
When Does the SBA Require a Business Valuation?
The SBA outlines specific rules about when an independent valuation is necessary. Here’s the simple decision tree:
- Is ownership changing?
If yes, continue. If no, a valuation isn’t required. - Is the total financing (loan + buyer equity) greater than $250,000?
If yes, an independent business valuation is required.
So, if you're buying a business with SBA-backed funding over $250,000 and the ownership structure is changing, the SBA mandates an independent valuation to ensure the price being paid is supported by fair market value.
This is where Strong Tower Valuations comes in.
What the SBA Requires in a Valuation
The SBA isn’t looking for a quick rule-of-thumb multiple or an informal broker opinion. The valuation must meet specific requirements:
- Independence: The valuation must be conducted by a neutral third party—not by the lender, the buyer, or any affiliated party.
- Credentialed Professionals: The appraiser must hold recognized credentials such as CVA, ASA, ABV, or CBA.
- No Conflicts of Interest: To protect the integrity of the transaction, the valuator must remain unbiased and free from any influence by parties involved in the deal.
- Proper Scope and Methodology: The valuation must use accepted valuation methodologies and support a fair market value conclusion with detailed documentation.
At Strong Tower Valuations, all of our work is performed by certified professionals who meet or exceed these standards. Our reports are built to withstand SBA scrutiny—and give buyers and lenders peace of mind.
What’s Included in a SBA-Compliant Valuation?
An SBA-compliant valuation isn’t just a number—it’s a comprehensive analysis that provides a narrative around value. Our reports include:
1. Narrative Report
We provide detailed background on the business, including financial context, economic trends, risk factors, ownership history, and assumptions used in valuation models.
2. Detailed Financial Analysis
We analyze historical financials, adjust for one-time expenses or owner benefits, and benchmark performance against industry peers. Forecasts and projections may also be included where appropriate.
3. Fair Market Value Conclusion
Using accepted valuation approaches (Income, Market, and Asset-Based), we conclude a fair market value supported by data, assumptions, and professional judgment.
The SBA requires not just any valuation—but one that clearly and defensibly supports the price being paid. That’s why our reports are built with care, clarity, and compliance.
Timely Delivery You Can Count On
Business deals move fast—and SBA timelines are no exception. At Strong Tower Valuations, we understand the urgency of transactions and offer streamlined turnaround times to meet lender and buyer needs.
We coordinate directly with buyers, lenders, and legal teams to ensure reports are delivered quickly and accurately. Whether you're in Rochester, Buffalo, Tampa, or anywhere in between—we're your partner in getting deals done the right way.
Why a Quality Valuation Matters
A low-quality valuation can delay your loan, trigger unnecessary SBA review, or even cause a deal to fall apart. Worse, it can expose buyers and lenders to risk if the price paid significantly exceeds fair market value.
Here’s why working with a trusted valuation firm matters:
- Confidence for Buyers & Lenders: Everyone involved knows the price is justified.
- IRS & Legal Protection: If issues arise later, a strong valuation report can support your position.
- Smoother SBA Approval: Lenders often request firms they know and trust. We’re proud to be on that list.
At Strong Tower Valuations, we don’t just check boxes. We provide a valuation experience that delivers insight, professionalism, and peace of mind.
Is an SBA Loan Involved in Your Deal?
If you’re using SBA financing to buy or sell a business, don’t wait until the last minute to get your valuation in motion. Whether you’re a buyer, seller, attorney, or lender, we’re here to help you get what you need—fast, accurate, and compliant.
We serve clients throughout New York, Florida, and across the U.S. with trusted valuation work backed by years of experience and credentialed professionals.
‹ Back