SBA Lender Services
Business valuations and Quality of Earnings for SBA change of ownership loans
SBA SOP 50 10 8.1, effective October 1, 2026, requires lenders to obtain an independent business valuation and, for larger acquisitions, a Quality of Earnings report prepared for the lender. BVMA Advisors delivers both through a single engagement.
Discuss a pending transactionWhat the SOP requires
Financial due diligence for change of ownership
Business valuation
Change of ownership transactions require an independent business valuation. Above the SBA's threshold, it must be performed by a Qualified Source holding a recognized credential, such as the ABV, and it must be requested by and prepared for the lender.
Quality of Earnings
Initial Acquisition and Business Expansion transactions at or above the SBA's purchase price threshold also require a Quality of Earnings report, prepared by an independent, experienced financial professional for the benefit of the lender. Its normalized earnings drive the debt service coverage analysis.
Review of a buyer's QoE
When a buyer has already commissioned its own Quality of Earnings, the lender may rely on it only after a review by one of the lender's approved vendors. We perform these reviews as a separate, focused engagement.
One engagement, one fee
Valuation and Quality of Earnings from one firm
At many accounting firms, the business valuation and the Quality of Earnings sit in different service lines, staffed by different teams, each with its own engagement letter and its own fee. BVMA Advisors performs both under a single engagement and one fixed fee, so your borrower pays once and your credit team works with one firm.
- One engagement letter and one point of contact
- One fixed fee covering both the valuation and the Quality of Earnings
- Two separate reports, as the SOP requires, built on a consistent understanding of the business
- One coordinated information request for the borrower and seller
QoE scope
Aligned with SOP 50 10 8.1
Our Quality of Earnings reports are scoped to the elements the SOP requires, so your credit file is complete and your debt service coverage rests on verified earnings.
- Reconciliation of accountant prepared financial statements, tax returns, internal financial statements, and IRS transcript data
- Cash proof reconciling bank activity to the income statement and tax returns for the trailing twelve months and the last two fiscal years
- Documented add backs and adjustments, including non recurring items, owner compensation, related party transactions, deferred maintenance, and cash to accrual differences
- Assessment of revenue quality, including customer concentration, contract continuity, and the sustainability of margins after the sale
- Normalized earnings presented for the lender's debt service coverage analysis
Why lenders work with us
Qualified Source credential
Our valuations are performed by professionals holding the ABV, one of the credentials recognized by the SBA for business valuations.
Transaction experience
Our analysts bring Big Four and national firm financial due diligence experience on lower and middle market transactions.
Independence
Every report is prepared for the lender and never for the buyer or seller, consistent with the SOP.
Built for loan timelines
A defined scope, a fixed fee, and turnaround planned around your approval and closing schedule.
Add BVMA Advisors to your approved vendor list
We welcome the opportunity to support your SBA acquisition lending.
References are to SBA Standard Operating Procedure 50 10 8.1, effective October 1, 2026. BVMA Advisors is an independent firm and is not affiliated with or endorsed by the U.S. Small Business Administration. Each lender determines its own approved vendors and requirements.