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...
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,...
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...
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...
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...
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...
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...
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...