The SBA 7(a) program is the SBA’s primary program for providing financial assistance to small businesses. While the loan can be used for a variety of purposes, the standard 7(a) loan program allows for a maximum of $5 million in financing which can be used for the purposes of a business acquisition.
The SBA does not directly lend to small businesses or potential acquirers. Instead, it provides a guarantee on a portion of the loan which is funded by an SBA-approved lender. The SBA has a Preferred Lenders Program (PLP) that provides lenders with the ability to make the final credit decision. Nonpreferred lenders are required to send loans and the extensive documentation associated with the loan to the SBA for approval.
Under the 7(a) program, lenders are required by the SBA’s Standard Operating Procedures (SOP) to obtain a business valuation for business acquisitions that result in goodwill exceeding $250K or if the transaction is entered into by two related parties such as business partners, employee/employer, or family members. Our express engagement process delivers SBA SOP compliant reports within three to seven business days.
We understand how important it is to provide our reports to SOP lenders in a timely manner without sacrificing the quality of the deliverable. Due to our years of experience and innovation on large and complex engagements, we are able to provide our SBA valuation reports within 3 to 7 business days. Typical business valuation for SBA purposes will be executed under the following process: