The SBA’s New Quality of Earnings Requirement: What It Means and How to Get It Right
The SBA’s new Quality of Earnings requirement is here. But what does it actually require, what should the analysis accomplish, and how should lenders evaluate the professionals performing the work?
In Episode 7 of Valuation Blueprint™, Darren Mize breaks down the role Quality of Earnings now plays in qualifying SBA transactions and four core areas of the analysis.
He also addresses an important question facing lenders: How do you qualify a Quality of Earnings provider?
With limited requirements around provider credentials and report format, Darren explains why lenders should look beyond cost and turnaround time and consider credentials, experience, scope of work, and the professionals actually performing the financial analysis.
At GCF, Quality of Earnings is another way we deliver Deal Integrity℠ to the transaction. The goal goes beyond completing a required report. It’s about independently verifying the financial foundation, identifying risks that may not be obvious in the initial financials, and providing analysis that lenders and other transaction parties can rely on.
Darren brings that to life through a real transaction where Quality of Earnings analysis uncovered a significant customer concentration risk that wasn’t apparent in the initial information—demonstrating why the depth and quality of the work matter.
For SBA lenders, brokers, and M&A advisors navigating the new Quality of Earnings requirement, this episode explains what to look for, what to ask, and why choosing the right provider matters.
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