Why SBA Lenders Need Main Street Business Valuation Specialists for Acquisitions Under $1 Million
Introduction: Not All Business Valuations Are Created Equal When an SBA lender finances the acquisition of a small business, obtaining an accurate valuation is one of the most important steps in the lending process. However, a common misconception exists within the commercial lending industry: a valuation firm experienced in large corporate transactions must also be qualified to value small businesses. That assumption can create significant problems. Valuing a $500,000 owner-operated business requires a different approach than valuing a $15 million company. The financial structure, owner involvement, operating risks, and available financial information are often dramatically different. For lenders participating in the Small Business Administration's 7(a) loan program, understanding these differences can improve underwriting decisions, reduce unnecessary valuation expenses, and support more efficient business acquisitions. The solution is straightforward: match the valuation ...