Quality of Earnings Reports for SBA Lenders
Effective October 1, 2026, SBA SOP 50 10 8.1 requires an independent Quality of Earnings (QofE) report for qualifying 7(a) acquisitions of $3 million or more.
Finance Fight Club® delivers independent, lender-directed QofE reports built for owner-operated businesses, without the private-equity process or price tag.
What the New SBA Rule Means for Lenders
✓ Required for 7(a) Initial Acquisition and Business Expansion loans
✓ Applies at a purchase price of $3M or more
✓ Measured before buyer equity, seller financing, or other sources
✓ Owner-occupied real estate is excluded
✓ Required in addition to the business valuation
Why Lenders Work With Us
Sized for SBA Deals
Not a private-equity process:
Businesses with $2M to $15M in revenue
Purchase prices up to $15M
Rigorous where underwriting requires it
Practical everywhere else
A CFO-Level Cash Flow Lens
We look past seller-adjusted EBITDA or SDE:
Books, tax data, and cash reconciled together
Seller add-backs tested, not repeated
Earnings tested against debt-service capacity
Clear flags when records fall short
A Lender-First Process
Built around your underwriting team:
You approve scope and receive the final report
Material issues raised early, not at closing
Concise, underwriting-ready findings
Buyer may pay through your normal fee process
*A QofE does not replace the required business valuation. Finance Fight Club® can also complete a business valuation for an additional fee.
Our Lender-Directed QofE Process
Readiness Review
Deal & record review
Early issues flagged
Scope & timeline
Fixed-fee proposal
1
Data Collection
One data request
IRS transcripts
GL, bank & payroll
Lender-directed
2
Reconciliation
Books to tax returns
IRS transcript match
Proof of Cash
Deposit testing
3
Normalized Earnings
Add-backs tested
Owner compensation
Related-party terms
Revenue risk
4
Findings Report
Earnings bridge
Key adjustments
Cash proof findings
Risks & limitations
5
Review & Close
Lender walkthrough
Issues raised early
Kept in credit file
4-week target
6
The Lender Stays in Control
Every QofE is prepared for the lender’s benefit, never by or for the seller. You approve the scope, receive the final report, and keep it in your credit file.
If the records can’t support a reliable conclusion, we tell you early instead of forcing a weak file through just because an LOI is signed.
Become a Preferred QofE Partner
We’re partnering with SBA lenders who want a reliable, right-sized QofE provider on their vendor list. Let’s talk about your pipeline and how we can support your team.
Book a Discovery Call with Natalie
Or email us at hello@financefightclub.com
Finance Fight Club® is a management consulting firm and is not a licensed CPA firm. Our QofE services are advisory in nature and do not constitute an audit, review, compilation, examination, or other attestation service.
Ready to add a trusted QofE partner to your vendor list?
Most QofE reports are completed within 4 weeks of receiving all necessary data.
