Guides to SBA acquisition loans, valuations and Quality of Earnings
88 plain-English guides for buyers, brokers and SBA lenders. Rules checked against SBA SOP 50 10 8.1 and IRS sources as of October 2026. Start with SBA loans to buy a business, the SOP 50 10 8.1 change-of-ownership rules or Quality of Earnings.
SBA loans to buy a business 17
How SBA 7(a) acquisition loans work, what they cost and who makes them.
How lenders underwrite an SBA loan to buy a business
How SBA lenders underwrite a 7(a) loan to buy a business under SOP 50 10 8.1: eligibility, valuation cap, QoE, 1.25x DSC, equity and a worked example.
Read the guideAcquisition loan structure: how the financing pieces fit together
How lenders structure business acquisition financing: senior SBA or bank debt, seller notes, standby debt, investors and cash, and SBA limits on each.
Read the guideBusiness acquisition lenders: banks, non-bank SBA lenders and how approval works
The kinds of business acquisition lenders, from SBA banks to non-bank and private lenders, what each does well and what to ask before you apply.
Read the guideBusiness acquisition loan rates, payments and closing costs
How business acquisition loan interest rates are set: SBA 7(a) maximum spreads over Prime, fixed vs variable, and what moves your rate within the caps.
Read the guideBusiness acquisition loans: options, structure and thin collateral
How a business acquisition loan is sized: cash flow coverage, the valuation cap and equity, plus collateral and terms, with SBA and conventional compared.
Read the guideHow much business can I afford? Calculator, income and liquidity
Calculate how much business you can afford with an SBA loan: maximum debt at 1.25x coverage, the valuation cap and the 10% equity you need.
Read the guideNon-SBA business acquisition loans: conventional, bridge and hard money
When a conventional, non-SBA business acquisition loan beats SBA 7(a): equity, term, seller rollover, earnouts, size and fees compared.
Read the guideSBA 504 loans: requirements and how they compare with 7(a)
How the SBA 504 loan works (bank, CDC and borrower shares, terms, job goals) and the narrow ways it can be used when you buy a business and its building.
Read the guideSBA 7(a) loan requirements: eligibility, citizenship and the core rules
SBA 7(a) loan requirements in one checklist: eligibility, citizenship, guaranties, equity, cash flow, collateral and documents, with notes on acquisitions.
Read the guideSBA Express loans and lines of credit vs standard 7(a)
Using an SBA Express loan to buy a business: the $500,000 cap, 50% guaranty, rate caps and the change-of-ownership rules that still apply.
Read the guideSBA business acquisition loan terms and loan limits
SBA business acquisition loan terms under SOP 50 10 8.1: 10-year maximum for the business, blended terms with real estate, rate caps, fees and guaranty.
Read the guideSBA loan brokers, pre-qualification and "SBA pre-qualified" listings
What an SBA loan broker or packager does on an acquisition, how they're paid, SBA Form 159 disclosure, and what to ask before hiring one.
Read the guideSBA loan requirements to buy a business: credit, experience and the rest
SBA loan requirements to buy a business under SOP 50 10 8.1 Appendix 15: valuation, QoE, equity, DSC by deal type, seller exit and site visit.
Read the guideSBA loans to buy an existing business, including from family or with a partner
When an SBA loan to buy an existing business is a change of ownership and when it's a start-up: stock vs asset deals, continuity and divisions.
Read the guideSBA preferred lenders, the lender lists and Lender Match
What an SBA Preferred Lender (PLP) is, how delegated authority changes the approval process for a business acquisition loan, and what it doesn't change.
Read the guideThe SBA 7(a) loan, explained for people buying a business
The SBA 7(a) loan explained: who makes it, loan and guaranty limits, rate caps, fees and terms, and what changes when you use it to buy a business.
Read the guideThe SBA guarantee: how it works, who can lend and what it covers
What the SBA guarantee is and isn't: 85%, 75% and 50% guaranty percentages, the $3.75M cap, the guaranty fee, and why you still sign a personal guaranty.
Read the guideDeal structure: equity, seller notes, DSCR and guarantees 10
The rules that decide how much you can borrow and what you have to put in.
How much down payment do you need for an SBA loan to buy a business?
How much down payment an SBA 7(a) loan needs to buy a business under SOP 50 10 8.1: the 10% rule, what counts, seller notes and a worked example.
Read the guideSBA 7(a) refinancing, prepayment fees, assumption and servicing
SBA 7(a) refinance rules for acquisition debt and seller notes: the 36-month seller note rule, 10% payment improvement, and same-institution limits.
Read the guideSBA DSCR requirements for acquisitions, and the tax returns behind them
SBA DSCR requirements under SOP 50 10 8.1: 1.25x for acquisitions, 1.15x for expansions, how EBITDA and adjustments work, with a worked example.
Read the guideSBA collateral, life insurance and site visit requirements
SBA collateral rules for business acquisition loans: the 'fully secured' haircuts, liens on business assets, and when your home becomes collateral.
Read the guideSBA equity injection sources: what a lender can count
Which equity sources an SBA lender can count under SOP 50 10 8.1: cash, gifts, home equity, standby debt, investors, and the documents to verify.
Read the guideSBA guarantor requirements on acquisition loans, LLC borrowers and exceptions
SBA guarantor requirements for acquisition loans: 20%+ owners, spouse aggregation, post-sale ownership, the six-month lookback and seller guaranties.
Read the guideSBA seller financing requirements and the earnout prohibition
SBA seller financing rules under SOP 50 10 8.1: full standby notes as equity, paying notes in DSC and the valuation cap, earnouts, refinancing.
Read the guideSBA working capital: term loans, lines of credit and 7(a) Small loans
How working capital fits in an SBA acquisition loan: what's allowed, the 50% explanation rule, lines of credit alongside, and the 90-day rule.
Read the guideSBA 7(a) loans with no down payment: 100% financing claims and ROBS
Can you get an SBA 7(a) loan with no down payment? Not for a first purchase. When Business Expansions, Owner Buyouts and ESOPs can skip it.
Read the guideSBA seller consulting agreements, partial changes of ownership and partner buyouts
SBA rules on the seller staying after an acquisition: no officer, owner or employee roles, consulting up to 24 months, exceptions, and what lenders check.
Read the guideApplying, underwriting and timelines 3
Documents, forms, underwriting and what slows a deal down.
Documents required for an SBA loan, including the forms and business plan
The documents required for an SBA 7(a) acquisition loan, split into buyer, seller and deal lists, based on SOP 50 10 8.1 Appendix 15 and Appendix 20.
Read the guideSBA underwriting guidelines: the rules, approval rates and credit history
SBA underwriting guidelines for business acquisitions under SOP 50 10 8.1: what the lender's credit memo must cover, the ratios it runs and red flags.
Read the guideThe SBA 7(a) loan process: how to apply and how long approval takes
The SBA 7(a) loan process for a business acquisition, from LOI to funding: who does what, when the valuation and QoE happen, and what slows deals down.
Read the guideDeal types and industries 8
Franchises, partner buyouts, real estate and industry-specific acquisition loans.
SBA loans to buy real estate with a business: terms and limits
Buying a business and its building with SBA financing: Business Purchase Price, appraisal, separate vs blended loans, 504 and equity.
Read the guideBuying a daycare or childcare center with an SBA loan
SBA loan for a daycare purchase: licensing and transfer timing, enrollment and staffing data lenders want, subsidies, grants and a worked example.
Read the guideBuying a laundromat with an SBA loan
SBA loan for a laundromat: proving cash and card revenue, machine age, the lease, utilities, small-deal valuation rules and a worked example.
Read the guideBuying a trucking company with an SBA loan
SBA loan for a trucking company: fleet replacement in coverage, truck collateral haircuts, operating authority in stock vs asset deals, and an example.
Read the guideBuying an auto repair shop with an SBA loan
SBA loan for an auto repair shop: what lenders verify, the owner-technician adjustment, environmental review, buying the building and a worked example.
Read the guideBuying an independent pharmacy with an SBA loan
SBA loan for a pharmacy acquisition: inventory and the working capital line, PBM reimbursement risk, DEA and state licensing, and a worked example.
Read the guideBuying an insurance agency with an SBA loan
Buying an insurance agency with an SBA 7(a) loan: eligibility, commission checks, retention risk, no earnouts, collateral gaps and a worked example.
Read the guideSBA loans for hotels, self storage, car washes and gas stations
SBA loans to buy a hotel: special purpose property rules, 25-year terms, projection-based DSC, appraisal requirements and franchise flag issues.
Read the guideFor lenders and credit officers 6
SOP 50 10 8.1 change-of-ownership rules, ordering reports and reviewing them.
SOP 50 10 8.1 change-of-ownership rules, explained section by section
SBA SOP 50 10 8.1 change-of-ownership rules (Appendix 15), effective Oct 1, 2026: deal types, valuation, QoE, equity, DSC, terms and collateral.
Read the guideHow the business valuation limits an SBA acquisition loan
How SOP 50 10 8.1 caps total acquisition debt at the business valuation, how a price above value becomes equity, and how QoE-based DSC can cut it further.
Read the guideHow to review a business valuation report for an SBA loan
A credit officer's checklist for reviewing an SBA business valuation: Qualified Source, scope, inputs, normalization and red flags.
Read the guideOrdering an SBA business valuation: what the engagement should say
What an SBA lender's valuation order should include under SOP 50 10 8.1: engagement by the lender, scope of work, documents, independence and timing.
Read the guideThe SBA credit memo for a change of ownership: what it must cover
What an SBA credit memorandum must cover for a 7(a) change of ownership under SOP 50 10 8.1 Appendix 15, as a working checklist for credit officers.
Read the guideThe four SBA change-of-ownership transaction types
The four SBA change-of-ownership types under SOP 50 10 8.1: Initial Acquisition, Business Expansion, Owner Buyout and ESOP, and what each changes.
Read the guideSBA business valuations 6
Qualified sources, what's in the report, cost drivers and credentials.
SBA valuation requirements for lenders on change-of-ownership loans
What SOP 50 10 8.1 requires of lenders on business valuations: Qualified Source, ordered for the lender, report contents, the $350K option and the cap.
Read the guideBusiness appraisal: how it differs from a valuation, a calculation and a broker opinion
Business appraisal vs valuation vs broker opinion of value vs calculation: who prepares each, what it is for and what SBA lenders accept.
Read the guideBusiness valuation services: what you're actually buying
What a business valuation service delivers, the difference between a conclusion and a calculation, what an SBA lender needs, and how to choose a provider.
Read the guideCertified Valuation Analyst (CVA): what the credential means
What a Certified Valuation Analyst (CVA) is, who issues it, requirements, how it compares with ABV and ASA, and why it qualifies for SBA valuations.
Read the guideCommercial property appraisal in an SBA business acquisition
When an SBA business acquisition needs a commercial real estate appraisal as well as a business valuation, the SOP appraisal rules, and how the two fit.
Read the guideSBA Qualified Source: who can sign a 7(a) business valuation
Who counts as an SBA Qualified Source: the five accepted credentials (ASA, CBA, ABV, CVA, BCA) compared, regular compensation, independence and vetting.
Read the guideQuality of Earnings 6
What a QoE is, the SBA requirement, adjustments and the proof of cash.
Quality of Earnings (QoE): what it is and what it tests
What a Quality of Earnings (QoE) report is, what it tests, how it differs from an audit, and when SBA requires one under SOP 50 10 8.1.
Read the guideProof of cash reconciliation: how it works in a lender-side QoE
How a proof of cash reconciliation ties bank statements to revenue, expenses and tax returns, what SBA requires in a QoE cash proof, with a worked example.
Read the guideQuality of earnings adjustments: the categories, with examples
The main quality of earnings adjustments, with examples: non-recurring items, owner pay, related parties, deferred maintenance and cash vs accrual.
Read the guideQuality of earnings providers: how to choose, engage and review one
How to choose a quality of earnings provider for an SBA or private acquisition: questions, independence, cost drivers and red flags. No names or rankings.
Read the guideQuality of earnings report: an annotated example, template and document checklist
An annotated, illustrative quality of earnings report example: summary, EBITDA bridge, cash proof, revenue quality and findings, with what each part shows.
Read the guideSBA Quality of Earnings requirements for lenders on $3 million-plus acquisitions
What SOP 50 10 8.1 requires of lenders on Quality of Earnings: the $3M trigger, exemptions, independence, cash proof, vendor review and DSC use.
Read the guideValuation methods and industry valuations 16
Income, market and asset approaches, goodwill, discounts and industry notes.
Accounting firm valuation, and how SBA rules change the deal
How an accounting practice is valued: recurring fees, client retention, staff and seasonality, and why common retention-based earnouts don't fit SBA loans.
Read the guideConstruction company valuation: WIP, backlog and bonding
How a construction company is valued: WIP schedules, over and under billings, backlog quality, bonding capacity, equipment and SBA lending issues.
Read the guideDental practice appraisal: how a practice is valued
How a dental practice appraisal works: collections vs production, hygiene, payer mix, owner dentist pay, equipment and goodwill, and SBA lending rules.
Read the guideESOP valuation: adequate consideration, and how SBA treats it
How ESOP valuations work: adequate consideration under ERISA, the trustee's role, annual updates, and how SBA treats ESOP valuations and equity.
Read the guideFair market value of a business: what it means and how it differs
The definition of fair market value of a business, how it differs from investment value and fair value, and which standard SBA, tax and 409A work use.
Read the guideFinancing goodwill: how lenders underwrite intangible-heavy acquisitions
How lenders finance goodwill in a business acquisition: why SBA allows it, what replaces collateral, how goodwill is valued and taxed, with an example.
Read the guideFranchise valuation: how to value an existing franchise unit
How to value and finance a franchise unit: unit cash flow, term and renewal, transfer fees, remodel duties, and SBA Franchise Directory rules.
Read the guideIncome-based valuation: capitalization and discounted cash flow, worked through
How the income approach values a business: capitalization of earnings and discounted cash flow, building the rates, with worked examples.
Read the guideLaw firm valuation: methods and ownership rules
How a law firm is valued: recurring work, origination, WIP and receivables, lawyer pay normalization, and state ethics rules on ownership and sale.
Read the guideMedical practice valuations: methods and regulatory limits
How medical practice valuations work: physician pay normalization, payer mix and coding risk, and why fair market value matters under fraud and abuse laws.
Read the guideMerger and acquisition valuation: price vs value, and who pays for synergies
Merger and acquisition valuation explained: price vs value, who pays for synergies, and why an SBA lender's valuation ignores buyer-specific synergies.
Read the guideThe adjusted net asset method: asset-based valuation and when to use it
How the adjusted net asset method values a business, going concern vs liquidation premises, a worked example, and why it often sets a floor for lenders.
Read the guideValuation of a SaaS company, and when SBA financing fits
How SaaS companies are valued: recurring revenue, churn, net revenue retention, margins and deferred revenue, and when an SBA acquisition loan fits.
Read the guideVeterinary practice appraisals: how a vet clinic is valued
How veterinary practice appraisals work: revenue mix, doctor pay normalization, pharmacy and inventory, real estate, staff and SBA acquisition rules.
Read the guideHow HVAC businesses are valued
How an HVAC company is valued: maintenance agreements, revenue mix, technicians, licensing, fleet and normalized earnings, and how SBA finances one.
Read the guideHow restaurants are valued
How restaurants are valued: normalizing owner pay and rent, the lease, liquor licences, the asset floor, and how SBA lenders finance a restaurant purchase.
Read the guide409A valuations 3
Safe harbors, methods, strike prices and how often to update.
409A valuations: what they are and how they work
What a 409A valuation is, why private companies need one before granting options, the three safe harbors in the Treasury regulations, methods and timing.
Read the guide409A safe harbor and valuation requirements: what the regulation says
The three 409A safe harbor presumptions in Treas. Reg. 1.409A-1(b)(5)(iv)(B)(2): independent appraisal, binding formula, and the illiquid start-up rule.
Read the guideThe 409A valuation process: steps, cost, report and timing
The 409A valuation process step by step: documents to gather, management interview, modelling, draft review, board approval and grant timing.
Read the guidePurchase price allocation and Form 8594 13
Allocating price across asset classes for tax and for the books.
Purchase price allocation: how to split a business price across assets
Purchase price allocation explained: the seven IRS asset classes and residual method for Form 8594, book PPA under ASC 805, and a worked example.
Read the guideASC 805 purchase price allocation: the book side of a business purchase
ASC 805 purchase price allocation for small deals: who needs it, how it differs from the tax allocation, private company options and a worked example.
Read the guideAllocation of purchase price in a stock sale: when it happens and when it doesn't
Is there a purchase price allocation in a stock sale? When there isn't, when 338(h)(10), 336(e) or an LLC purchase changes that, and what SBA lenders see.
Read the guideAllocation of purchase price to goodwill: how much, and why it isn't a free choice
How allocation of purchase price to goodwill works: why goodwill is the residual, goodwill vs equipment for buyer and seller, and what supports the split.
Read the guideAsset purchase price allocation: how to calculate it and agree it
How to calculate an asset purchase price allocation step by step, what goes in the purchase agreement, and where buyer and seller can and can't negotiate.
Read the guideForm 8594: how the IRS allocation of purchase price works
IRS Form 8594 explained: who files, when, the seven asset classes, the residual method, a line-by-line walkthrough and supplemental statements.
Read the guidePPA intangible assets: what to identify, and how each is valued
PPA intangible assets: the Section 197 intangibles small deals contain, how customer lists, trade names and non-competes are valued, and what's excluded.
Read the guidePurchase price allocation and inventory: valuing Class IV at fair market value
Purchase price allocation for inventory: Class IV rules, the three IRS methods in Rev. Proc. 2003-51, a worked example and tax effects for both sides.
Read the guidePurchase price allocation and real estate: splitting land, building and business
Purchase price allocation with real estate: splitting land, building and improvements, IRS methods, a worked example and the SBA appraisal link.
Read the guidePurchase price allocation examples, with the arithmetic shown
Purchase price allocation examples with the arithmetic shown: a standard residual allocation, a price below asset value, a rebate and a price increase.
Read the guidePurchase price allocation schedule: a template you can actually use
A purchase price allocation schedule template for an asset purchase agreement: columns, asset classes, a filled-in example and how it maps to Form 8594.
Read the guidePurchase price allocation tax considerations for buyers and sellers
Purchase price allocation tax considerations for buyer and seller: how each class is taxed, recapture, non-competes, seller notes and what to negotiate.
Read the guideSection 1060 purchase price allocation: what the statute and regulations require
Section 1060 purchase price allocation in plain English: when it applies, the residual method under Reg. 1.338-6, binding written agreements and reporting.
Read the guide