Effective October 1, 2026, SBA SOP 50 10 8.1 mandates a separate Quality of Earnings (QoE) report for $3M+ business acquisitions and expansions (less appraised real estate) under the 7(a) and CDC/504 loan programs. Owner Buyouts and ESOPS are exempt. For SBA lenders, this represents an important change in the financial due diligence supporting larger […]
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Most owners only think about business valuation when they “have to.” A buyer makes an offer. A partner wants out. An advisor brings up gifting or estate tax. Suddenly, everyone is scrambling to pull financials, justify add‑backs, and defend a value conclusion. There is a better way. Forward‑thinking owners treat business valuation as an annual […]
Equipment Appraisal: A Complete Guide to Accurate Machinery & Equipment Appraisals (M&E) for Your Business When equipment makes up a large share of your balance sheet, guessing at its value is risky. A professional Machinery & Equipment (M&E) Appraisal gives lenders, buyers, and owners a defensible, well-documented report they can rely on for major decisions. […]
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Deal Ready Financials®: Why CPA-Prepared, Lender-Ready Carveout Statements Are the Key to Closing Your Next SBA Deal Time kills deals. In SBA lending, one of the most consistent — and preventable — causes of delay is financial documentation that was never built for the transaction process. By the time a file reaches underwriting, most of […]
Equipment Appraisal: A Complete Guide to Accurate Equipment Valuations When equipment underpins your operations, treating its value as an afterthought can derail loans, deals, and planning. A professional Machinery & Equipment (M&E) Appraisal gives lenders, buyers, and owners a defensible, well-documented view of what their machinery and equipment are truly worth. If equipment collateral cannot […]
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When you are structuring a sale, SBA loan, ownership transfer, or other transaction, choosing between a Calculation Report (Calculation of Value) and a Business Appraisal (Conclusion of Value) has real consequences for cost, timing, risk, and how the valuation can be used. What Is a Calculation Report? A Calculation Report, sometimes referred to as a […]
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Add-Back Tracing®, also referred to as Income Statement Adjustment Tracing, is a standalone financial due diligence service designed to identify, document, and substantiate proposed add-backs in a business’s financial statements. While add-backs are commonly referenced in valuation, lending, and M&A discussions, Add-Back Tracing® itself is not part of a business valuation. Instead, the purpose of Add-Back Tracing® is […]
When buying or selling a small business, one question always comes up: How reliable are the financials? Whether you’re an SBA Lender, M&A Advisor, Buyer, or Seller, the goal is the same — to confirm that reported earnings truly reflect how the business performs. GCF Valuation offers two specialized services to help you get there: Add-Back […]
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Why Value a Home Healthcare Business? Determining a Fair Purchase or Sale Price The home healthcare sector continues to attract buyer interest due to aging demographics, recurring revenue models, and growing demand for in-home medical and non-medical care. But valuing a home healthcare business is far from straightforward. From reimbursement risk to caregiver turnover, many […]
Few small businesses are as straightforward—and as attractive to buyers—as coin-operated laundromats. With minimal labor, predictable cash flow, and strong demand in urban and rental-heavy areas, these businesses often trade at higher cash flow multiples than many other small businesses. Whether you’re thinking of selling, buying, or securing SBA financing, a professional valuation can help […]
Read More… from Coin-Operated Laundry Business Valuation: Why Simplicity Drives Stronger Multiples
Discover what makes financial statements “deal ready” for SBA carve-out transactions and divestitures — and why lenders trust GCF to prepare them. In today’s SBA lending environment, messy or incomplete financial statements can stop a transaction in its tracks. When lending on a transaction involving a divestiture and securing SBA financing for that “carve-out”, your […]
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Why Valuation in This Industry Isn’t One-Size-Fits-All Whether you’re selling a sandwich shop, buying a pizza franchise, or considering an investment in a fast-casual chain, understanding the value of a limited-service restaurant (LSR) isn’t as simple as applying a “rule of thumb.” While lesser-experienced appraisers may toss out generic multiples, the appraisers at GCF Valuation […]
U.S. tariffs are creating uncertainty in 2025, affecting supply chains, revenue, margins, and overall business performance. At GCF Valuation, we specialize in providing accurate, real-time business valuations that account for the impact of tariffs. Why Tariffs Matter for Business Valuations Our Approach Why It Matters to SBA Lenders & M&A Advisors Inaccurate valuations can lead […]
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The transportation industry is one of the backbones of the U.S. economy. It supports manufacturing, distribution, and retail sectors by delivering the goods needed to produce and sell the products that customers want to buy. It is truly one of the industry engines that drives economic activity. Because of this, business valuation plays a crucial […]
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Due to the complex nature of the construction industry, engaging a qualified business appraiser is an important first step in accurately determining a construction company’s value. Essential components such as Working Capital Requirements, Work in Progress (WIP), and dependence on Machinery and Equipment (M&E) significantly impact financial performance and must be analyzed in detail when […]
When selling a small business, the goal is always to maximize shareholder value and avoid leaving money on the table. Achieving this starts with an accurate business valuation. Since selling a privately held business can take a year or more, accuracy in valuation is crucial. An independent business valuation not only ensures accuracy but also […]
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As a business broker, you’ve spent years honing your craft—developing a keen understanding of your market, building client relationships, and closing deals that help businesses change hands smoothly. It’s no secret that in your field, experience matters. However, the marketplace is evolving, and the modern broker faces new challenges that require more than instinct and […]
Read More… from Traditional Meets Data-Driven: The Modern Business Broker’s Guide to Valuations
Industry benchmarks serve as a critical starting point when evaluating the financial and operational performance of a company. High performance often correlates with a higher valuation, making these benchmarks essential. GCF Valuation is a full-service business valuation firm dedicated to privately held businesses and the professionals who support them. During our appraisal process, we invest […]
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The Process of Equipment Appraisal and Its Importance in Asset Valuation Equipment appraisal is a critical component of asset valuation, providing an objective assessment of the value of machinery and equipment. This process is essential for various purposes such as financing, insurance, sale, and purchase transactions, tax assessments, and financial reporting. Here’s a step-by-step overview […]
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Industry benchmarks serve as a critical starting point when evaluating the financial and operational performance of a company. High performance often correlates with a higher valuation, making these benchmarks essential. GCF Valuation is a full-service business valuation firm dedicated to privately held businesses and the professionals who support them. During our appraisal process, we invest […]
Read More… from Industry Benchmarks for Limited-Service Restaurants
In the world of small business, every business is unique because every small business owner is unique. As a result, making the assumption that businesses operating within the same industry are going to be valued the same is an improper one. When looking at the various industry sectors (construction, manufacturing, distribution, etc.), the financial structure […]
What Should Not Be Overlooked When Valuing a Franchise Bottom line, the first thing you should ask in dealing with a franchise acquisition is, “What are franchisor-required remodels, and how much will be required?” It cannot be overlooked. Here are the valuation approaches that could be impacted. The Income Approach Estimating Increased Revenue From a […]
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In the fast-paced world of mergers and acquisitions (M&A), success hinges on informed decision-making and strategic negotiation. An integral component of this process is independent business valuations—an invaluable tool for M&A advisors seeking to guide their clients through complex transactions with confidence and clarity. The Importance of Commitment: At the outset of any M&A engagement, […]
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Recently, a lender (who now has become a client) came to us looking for a second opinion on a valuation of a Massage Envy Franchise. Their appraiser came back with a negative value conclusion which centered around deferred gift card liabilities transferring with the sale. We took a step-by-step review of the business and how […]
Steve Mize, ASA In small business transactions, purchase agreements can be written any number of ways. For those businesses that are dependent on inventory to generate revenue and cash flow, you’ll typically see the purchase agreements structured where the Price includes Inventory or Price + Inventory. All qualified appraisers agree that inventory is REQUIRED to […]
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Steve Mize, ASA Business Valuations are critical for sale, transition, and business planning. If you’re in one of these dynamic time periods in your own business, you may be left with the question, “What is a business valuation?” Put plainly, a business valuation is the value that has been determined by an accredited appraiser of […]
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One year later . . .and the small business acquisition market has changed significantly. COVID has impacted most businesses, positively or negatively. As a valuation firm, we are constantly being asked how COVID has impacted business values. Our response is not so simple, but let me try to explain: Steve Mize, ASA September 27, 2022 […]
Last year we wrote an article on how to value a “personal service” franchise. In the original article we discussed some of the concerns. One being a continued decline in revenue trends for this industry, due to competition and overall saturation in the market. Another, and more importantly, the reliance on “cash flow”. Steve Mize, […]
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A Quality of Earnings (QoE) analysis is a deep dive into the financial statements to understand where the business generates value. The Quality of Earnings is not an audit but rather a detailed financial analysis, and the two are not mutually exclusive but complementary. An audit is balance sheet focused, whereas the Quality of Earnings […]
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Recently, a lender (who now has become a client) came to us looking for a second opinion on a valuation of a Massage Envy Franchise. Their appraiser came back with a negative value conclusion which centered around deferred gift card liabilities transferring with the sale. We took a step-by-step review of the business and how […]
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Earlier this month, our team celebrated National Small Business Week. This past year has been a turbulent time for business owners and the SBA lending community, and we are proud to be part of a resilient community.
Usually, National Small Business Week is hosted by the Small Business Association (SBA), and this event takes place the first week of May. This year, the SBA is holding a virtual summit later in the fall. […]
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The COVID-19 pandemic has affected businesses globally in various ways — both positively and negatively. For the businesses who were hit hardest, look no further than your tangible assets as a lifeline to ride out the storm from the pandemic. Todd Taylor, EECA, Valuation Analyst & Jason Pagan, ASA Over the last year, we have […]
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Business Valuation Process Varies By Need Darren Mize, ASA What’s driving the request for a business valuation? Different circumstances call for a more – or less – comprehensive business valuation. Your specific need will determine both the timeline for a final report and the actual process a business valuation professional will follow. Different Types of Business […]
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Understanding the Business Valuation Equation GCF was engaged to value a pharmacy, and the lender quickly explained how “strong” the deal was, even stating, “This is a slam dunk!” So, we began the due diligence process and immediately discovered: If there’s a conversation underway about requesting a business valuation, the underlying question will always be around […]
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Professional Expertise, Insight, and Industry Experience Bring Crucial Context Darren Mize, ASA GCF was engaged to value a pharmacy and the lender quickly explained how “strong” the deal was even stating: “This is a slam dunk!” So, we began the due diligence process and immediately discovered: Whether you are a business owner, a lender, a business broker or financial […]
Darren Mize, ASA Let’s review the 3 approaches to value: Cost Approach Market Approach Income Approach The Cost Approach The Cost approach relies on the business’s balance sheet. So, unless the company is heavily invested in assets this approach is rarely used. The Market Approach The Market approach relies on comparable business transactions within the […]
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Steve Mize, ASA One of the most challenging aspects of valuing a small business is the use of Income Statement Adjustments, otherwise known as “add-backs”. For smaller businesses add-backs are common, but can they be verified? Add-Backs – The Questions We’re Asking • Can the expense being added back be traced back to the source […]
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Jason Pagan, ASA How is revenue being booked on contracts? The short answer: When accounting for contractual work, how revenue and expenses are booked on time-based projects (that span longer than 60 days) will have a direct reflection on cash flow and business value. Why is this contract value question critical to the value of […]
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Steve Mize, ASA GCF was engaged to value a pharmacy and the lender quickly explained how “strong” the deal was even stating: “This is a slam dunk!” So, we began the due diligence process and immediately discovered: Profit margins well above the industry average. Initial thoughts suggested “compounding” (which typically carry a higher profit margin). However, […]