🧯 Deadly Sin: Using the Wrong Standard of Value

If a valuation is based on strategic value instead of fair market value, the lender isn’t underwriting the business—they’re underwriting the buyer’s motives.

Fair market value assumes:

✅ A hypothetical buyer
✅ No special advantages
✅ A willing seller in an open market

Strategic value assumes:

💰 Synergies
🚀 Buyer-specific goals
📈 Higher (and riskier) price tags

📌 SBA appraisals must reflect fair market value.
Mixing up the standards? That’s a deal risk—and it violates the SBA’s requirements.