Loan underwriting valuation is the comprehensive assessment of a borrower's financial status and creditworthiness, crucial for lenders to make informed decisions regarding loan approvals, terms, and amounts while mitigating risks associated with potential defaults.
Valuations for Small Business Administration (SBA) loans are typically required during the loan application process when the lender needs to assess the value of the business or its assets used as collateral, specifically for loans where the collateral's value is a significant factor in determining loan approval or terms.
“If the amount being financed (including any 7(a), 504, seller, or other financing) minus the appraised value of real estate and/or equipment is greater than $250,000 or if there is a close relationship between the buyer and seller (for example, transactions between family members or business partners), the lender must obtain an independent business appraisal from a qualified source.”
All Reports Must:
- Be requested and engaged by the lender
- Be prepared for the lender
- Identify whether the transaction is an asset or stock purchase
- Explicitly state what is included in the sale (including any assumed debt)
- Include a conclusion of value
- Include qualifications of the individual performing the valuation
- Include a signature with certification page
- The lender may not use an appraisal which is prepared for the applicant or seller
- The cost of the appraisal may be passed on to the Small Business Applicant
Yes, we are a qualified source under the current SBA SOP 50 10 7.1.
Our appraisal team is certified by organizations such as the NACVA to prepare SBA underwriting valuations, and has received awards from the NACVA for the quality of their work.
Our lending risk assessment is a detailed analysis of potential risk factors that may impact default rates, such as the business’s core product’s positioning to weather a recession, impacts of inflationary pressures on the business, and ESG.
Our average turnaround time is 3-5 business days, which is equivalent to rush delivery from our competitors.