Use this checklist to assess businesses in this industry for SBA 7(a) lending and underwriting.

👨‍💼 Owner Dependency + Transition Risk

• Does the owner personally manage most client relationships?
• Are staff members or associates available to support retention?
• Has a buyer salary been substituted for the owner’s draw?
• Is a transition plan included in the deal structure?

🏷️ Client + Revenue Review

• Is revenue based on recurring services (monthly, quarterly, tax prep)?
• Are top clients identified with % concentration?
• Are seasonal revenue fluctuations accounted for?
• Is there any project-based or consulting income misclassified as recurring?

📊 Goodwill Transferability Test

• Would clients remain without the current owner?
• Are there processes, CRMs, or systems that support firm-wide goodwill?
• Is marketing or client referral pipeline institutionalized or owner-driven?

🚩 Red Flags to Watch

• No staff or systems, but high goodwill assigned
• Addbacks for personal travel, CPE, or ‘seasonal perks’
• Cash flow calculated using low owner comp with no buyer replacement wage

📌 SBA SOP Tip

CPA practices rely heavily on client trust. Personal goodwill, if high, must be discounted or mitigated with a structured transition plan.