SBA 7(a) Lending
Lender-Commissioned Quality of Earnings for SBA 7(a) Acquisitions (SOP 50 10 8.1)
Institutional analysis for Main Street acquisitions. The new SOP, as amended September 25, 2026, requires a QoE a lender can rely on for acquisitions of $3 million or more, commissioned by the lender, or by the buyer with a reliance letter and your own secondary review. Two passes on every number: the engine performs the tie-out, add-back testing, and benchmark pull, and the reviewer of record confirms every finding and signs the report. Five business days from complete materials.
Book a 20-minute callWhat changes for loan numbers issued on or after October 1, 2026
As amended by the September 25, 2026 technical updates (SBA Notice 5000-882227). Applications with loan numbers issued through September 30, 2026 remain under SOP 50 10 8.
$3M threshold
A Quality of Earnings report is required on Initial Acquisitions and Business Expansions with a business purchase price of $3 million or more.
Lender-commissioned
The QoE is commissioned by and prepared for the lender, not the buyer or the broker.
Cash Proof required
The report must include a Cash Proof covering the trailing twelve months plus the two most recent fiscal years.
QoE earnings drive DSC
The lender must use the QoE-verified earnings in the debt service coverage calculation, at the applicable Appendix 15 standard: 1.25:1 for Initial Acquisition, Owner Buyout, and ESOP or cooperative transactions, 1.15:1 for Business Expansion, subject to any higher lender standard (SOP 50 10 8.1, Appendix 15).
For SBA lenders
An independent Quality of Earnings report on the borrower's business, prepared for the lender's file.
Quality of Earnings, lender-commissioned. $10,000 per engagement.
Commissioned by the lender under a three-party engagement letter with the borrower. The same report a buyer receives, with no valuation content: the lender's copy addresses what the business earns, not what it is worth.
- Books reconciled to the tax returns and to IRS transcripts, line by line
- A cash proof: bank deposits set against reported revenue for the trailing twelve months and two fiscal years
- Every add-back classified as accepted, modified or rejected, with the document behind each
- Related-party items, each stated at the arm's-length figure or flagged
- Normalized earnings, with SDE and EBITDA both stated, and the bridge from year to year
- Working capital by month, with the level the figures support for the purchase agreement
- Inventory, where the business carries it
- Debt and items that behave like debt at closing
- Tax exposure, stated as findings
- The debt service coverage test at the lender's standard on historical earnings, with single-variable sensitivities
- The questions sent to the seller, the answers received, and the questions left unanswered
- A ranked risk register and a checklist of every procedure performed
Delivered as a written report, an Excel databook and an executive summary deck, within five business days of complete documents. Reviewed and signed by the reviewer of record.
Secondary Review. $5,000 per report.
A review, for a lender, of a Quality of Earnings report prepared by another firm, so the lender can decide whether to rely on it. Workup works from the other firm's report and databook and the borrower's documents in the lender's file; it does not contact the seller or the other firm. The review states the scope of the other firm's work against the lender's standard, ties its revenue, normalized earnings and add-backs to the documents, re-runs debt service coverage at the lender's standard on the figures as tested, and states where the report holds, where it does not, and what is missing. Delivered as a memo with a 30-minute call, within five business days of the complete file.
A buyer's Quality of Earnings report can also be delivered to a lender under a reliance letter. The lender's copy omits the valuation content.
Why lenders choose Workup
Reviewer of record.
Every finding is confirmed or overridden by the founder, who signs the report: twenty years evaluating businesses as an institutional investor, after beginning his career building them for sale as an M&A banker at Lehman Brothers. Overrides are recorded in the engagement file with their source and date.
Speed.
Delivered in five business days from complete materials, inside loan-number timelines, not after them.
Price.
Quality of Earnings, lender-commissioned: $10,000 per engagement. Secondary Review: $5,000 per report, five business days.
The buyer path.
Under the September 25 amendment, a QoE the buyer commissioned can be used, carried under a reliance letter and reviewed by one of your approved vendors, with the review findings kept in the loan file. A report prepared by or for the seller does not count. Workup issues the reliance letter with its buyer-commissioned Quality of Earnings report and performs the Secondary Review of another firm's report in five business days.
7(a) Small and SBA Express.
The amendment permits 7(a) Small and SBA Express loans for changes of ownership under Appendix 15, with no reduced DSC standard; an internal valuation is allowed at a business purchase price of $350,000 or less.
Independence.
Workup takes no success fees, brokers no transactions, and provides no financing, and does not issue a lender report on a target where it prepared the seller's financial presentation. Our only interest is getting the numbers right.
Insured.
Tech E&O and cyber coverage in place, $1 million aggregate. Certificates available on request.
Documented data handling.
Client documents are encrypted in transit and at rest, never used to train AI models, and deleted 90 days after report delivery. How Workup handles your documents.
Sample reports are being finalized. Ask us for one on the call. What the borrower uploads and what the lender supplies: the Document Request List.
For borrowers
The QoE is typically paid by the lender and reimbursed by the borrower as a permitted diligence expense; direct borrower payment is an alternative the lender may elect. Any treatment of the fee as an eligible project cost or equity injection is determined and documented by the lender under applicable SBA requirements; payment does not guarantee equity credit, and advisory expenses and Applicant-paid Agent fees are subject to exclusions. Before the lender’s report decides your deal, know where you stand: a Workup Pro screen shows the debt service coverage arithmetic at the asking price before you make an offer.
Lenders: request our engagement letter
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