22 Apr Business Valuations during the “New Normal”: The Impact of COVID-19
Due to the precautions to limit and slow down the spread of the novel coronavirus 2019 (COVID-19), many small businesses have experienced some level of decline in their...
Archive
17 Oct Policy Changes in the SBA SOP 50-10 5(J) that Impact Business Valuations and Equipment
The SBA has released an updated version of its Standard Operating Procedures (SOP) 50 10 5(J), which is effective January 1, 2018. The following discussion highlights key revisions...
25 May Determining a Reasonable Earnings Valuation Multiple
In the previous SBAvalue™ article Calculating Cash Flow (appraiser vs. lender), we discussed how a business appraiser calculates Seller’s Discretionary Earnings (SDE), which is an integral cash flow...
01 May Calculating Cash Flow (Appraiser vs. Lender)
Seller's Discretionary Earnings (SDE) is an integral cash flow stream for small businesses. SDE encompasses all cash flows paid to a single owner-operator, including an adjustment for owner's salary,...
31 Oct The Impact of Intangible Assets on Loan Structure
Prior to obtaining a business appraisal for a change of ownership loan, one of the most important processes for an SBA lender is structuring their use of proceeds...
18 May Clarification of 25% Contribution in a Partner Buyout
As stated in the SBA Standard Operating Procedures (SOP), if the purchase price of a business includes intangible assets in excess of $500,000, the borrower (or seller, in...
12 May Policy Changes in the SBA SOP 50-10 5(H) That Impact Business Appraisals and Real Estate Appraisals
The SBA has released an updated version of its Standard Operating Procedures (SOP) 50 10 5(H), which is effective May 1, 2015. The following discussion highlights key revisions...
31 Jan Risky Business: Relying on Valuation Rules of Thumb
Rules of thumb can be useful to determine if a proposed business transaction seems reasonable prior to accepting an SBA loan application. However, most businesses are unique, and...
10 Mar Essential Elements to Look For When Reviewing a Valuation
Business valuations compiled for SBA purposes are complex, often containing over 80 pages of financials, projections and analysis. Unfortunately, many readers are tempted to skim the summary page...
03 Sep Depreciation Downfall
Depreciation is not a precise measurement of “reduction in value” from original cost. It is an estimate of the decrease in the useful life of an asset, and...