Business valuation services: what you're actually buying

Published October 25, 2026 · Rules checked against SBA and IRS sources as of October 2026

"Valuation service" covers everything from an online estimate to a litigation-grade report. Knowing which one you need saves money and avoids a report nobody can use.

Match the service to the purpose

What a good report includes

• Purpose, standard of value (usually fair market value), premise and valuation date.
• What's being valued: equity or assets, what's included and excluded.
• Financial analysis and normalization adjustments with support.
• Approaches considered (income, market, asset) and why each was used or not.
• Conclusion of value; the analyst's qualifications; signed certification.
• Limiting conditions stated plainly.

Scope levels, in the standards' own terms

Professional standards draw the line between full and limited work. The AICPA's valuation standard for its members distinguishes a valuation engagement, which ends in a conclusion of value, from a calculation engagement, where analyst and client agree the procedures and the result is a calculated value. USPAP, followed by American Society of Appraisers members, has its own business appraisal standards for development and reporting. Ask any provider which standard they follow and which type of engagement you're buying; the answer should be in the engagement letter.

Standard of value and premise

The same business can have different values depending on the question. Fair market value assumes a hypothetical willing buyer and seller; investment value is worth to a particular buyer; fair value means different things in accounting and in state law. Premise matters too: going concern or liquidation. A report that doesn't state its standard and premise up front is hard to rely on. See standards of value.

What you'll be asked for

• Three to five years of financial statements and tax returns, plus a current interim.
• Details of the transaction or purpose, and the valuation date.
• Owner compensation, related-party arrangements and one-off items.
• Customer and supplier concentration, key contracts and the lease.
• A management interview, and often a site visit.

Where software and online calculators fit

Online valuation tools are good at arithmetic: applying a multiple, discounting cash flows, formatting a report. They can't decide which adjustments are real, judge customer risk or take professional responsibility, and they can't be an SBA Qualified Source.

Use a calculator as a rough screen before you engage anyone; don't anchor a price on it.

How long a valuation stays useful

A valuation speaks as of its date. For SBA purposes the lender needs one that reflects the deal actually closing; if the price, structure or the business's results change materially before closing, ask the valuer whether an update is needed. Tax and 409A valuations have their own timing rules, such as the 12-month window in the 409A regulation.

Choosing a provider

Credentials (ASA, ABV, CVA, CBA, BCA), experience with similar businesses, independence from the deal, a clear fee and timeline in writing, and sample reports with names removed. See how to choose a firm and what drives cost.

OKtoLend focuses on SBA lender-ordered valuations plus 409A and purchase price allocations. See how it works.

Choosing a valuation firm

Choose a business valuation firm on five things: the signer's credential, relevant experience with businesses like yours, independence from the deal, a clearly written scope and fee, and sample work you can read. For SBA lending, the signer must be a Qualified Source (ASA, CBA, ABV, CVA or BCA) who regularly does paid valuations, and the report must be prepared for the lender. We don't rank firms; use the checklist below.

First, match the specialist to the job

Before choosing between firms, make sure you're choosing the right kind of specialist. An SBA acquisition with real estate can need three separate reports, each with its own rules.

Ten questions to ask

1. Who will sign, and what credential do they hold?
2. How many valuations of businesses this size and industry did they do last year?
3. Do you have any relationship with the buyer, seller or broker?
4. Is the fee flat? What triggers extra charges?
5. Who is the client named in the report?
6. What will you need from us, and when?
7. Which approaches do you expect to use, and why?
8. Will you visit the business or interview management?
9. How do you handle questions from the lender's credit team?
10. Can we see a redacted sample report?

Reading a sample report

A redacted sample tells you more than a sales call. Spend ten minutes on it with these questions:

• Is the conclusion of value easy to find, and are purpose, standard of value and valuation date stated on the first pages?
• Does each normalization adjustment have a reason and a source, or is it a single "owner adjustments" line?
• Are approaches that were rejected explained, not just omitted?
• Does the analysis talk about this business (its customers, lease, staff), or could the text apply to any company?
• Is the signer's credential and independence statement included?

How lenders run a valuation panel

Most SBA lenders don't pick a firm deal by deal from scratch. They keep an approved panel of valuation firms that meet the Qualified Source rules, assign orders through someone outside loan production (so the loan officer doesn't choose the valuer for their own deal), and review each report against a checklist before relying on it. Lenders track turnaround and revision rates by firm, rotate work to avoid dependence on one provider, and refresh credential and independence evidence each year. A firm that wants panel work should expect that review, and a buyer whose lender has a panel should expect the lender, not them, to choose.

What the engagement letter should say

Whatever firm you choose, the engagement letter is where vague promises become commitments. Expect it to name the client (for SBA work, the lender), the purpose and intended users, the interest being valued (assets or equity, and what's excluded), the valuation date, the standard and premise of value, the type of engagement (a full valuation with a conclusion of value, or a calculation), the professional standards followed, the information the firm will rely on, the fee and what changes it, and the expected delivery once complete information is received. If the letter promises a delivery date before the firm has seen your records, treat it as an estimate.

Red flags

• Promises a value before seeing the numbers.
• Fee tied to the concluded value or to the deal closing.
• Won't name the signer.
• Report template doesn't name the lender as client.
• Turnaround promised before they've seen your records.

See what independence means.

Common questions

Related guides

• Business appraisal: how it differs from a valuation, a calculation and a broker opinion
• SBA valuation requirements for lenders on change-of-ownership loans
• SBA Qualified Source: who can sign a 7(a) business valuation
• Ordering an SBA business valuation: what the engagement should say
• Quality of earnings providers: how to choose, engage and review one

This guide explains rules and practice in plain English. It isn't legal, tax or credit advice, and SBA and IRS rules change. Check the current SOP, regulations and your lender's requirements before you rely on anything here. Examples with made-up businesses are illustrations, not real deals.