🧯 A balance sheet is not a valuation. Book value may be: Depreciated Incomplete Misclassified Or totally irrelevant for going-concerns 📌 SBA-compliant appraisals should focus primarily on the income approach with support from the market approach. The asset approach has limited applicability.

📘 New tool: Our Projections Risk Checklist for SBA lenders Includes: ✅ When projections are acceptable✅ Common abuses in appraisals✅ Questions for review 📩 Click here to grab your copy.

💼 We reviewed a valuation where the buyer projected 30% growth and a 2x revenue jump post-acquisition. The valuation? Based on unsupported projections as if the company were a startup. But: Mature business in a mature industry Historic growth = 2–3% No new contracts No capital investment We valued the business based on historic free … Continue reading 📊 Case Study: Startup-Level Projections in a Mature Business

📉 Projections are a tool—generally not a justification for 7a valuations. The SBA favors valuation based on historical performance, not hypothetical growth. But we’ve seen appraisals that: Use unsupported forecasts to support value Apply multiples to “future EBITDA” Ignore risk adjustments 📌 If the value is based on what the business might do or what … Continue reading 🧠 Sin Spotlight: Projections ≠ Valuation Basis

🧾 We built a CapEx Adjustment Worksheet to help lenders and analysts test if CapEx has been normalized. It includes: ✅ CapEx drivers✅ Normalization considerations ✅ Common appraisal errors✅ SBA considerations for capital assets 📩 Click here to grab your copy.

💼 A service company showed $480K in free cash flow—but had deferred equipment replacements for 3 years. When we normalized CapEx to $90K/year?⚠️ True FCF = $390K📉 Value dropped 20%—and the lender avoided a post-closing cash crunch. Cash flow without reinvestment isn’t sustainable. It’s short-term optimism.

🧯 Deadly Sin: Ignoring Capital Expenditures A business that looks cash-rich today might fall apart tomorrow if it’s not reinvesting. CapEx needs are often: 🔧 Buried in “repairs and maintenance”📉 Ignored in cash flow estimates📉 Excluded from projections 📌 SBA-compliant valuations must deduct reasonable ongoing CapEx to calculate real free cash flow. Otherwise, you're lending … Continue reading 🧠 Sin Spotlight: CapEx Gets Ignored Too Often

📘 We’ve built a Goodwill Evaluation Guide for SBA lenders. Inside: ✅ Definitions ✅ Transferability checklist✅ Real-world examples by industry✅ Tips for credit memos 📩 Click here to grab your copy.

We reviewed a $1.4M valuation for a solo dental practice. Cash flow looked great… but: No associate No buyer in place 90% of patients came to see the doctor, not the brand We applied a personal goodwill risk premium. Value adjusted. Structure changed. Deal closed—but safely. 📌 If the business is built on a name, … Continue reading 📊 Case Study: Doctor-Owned Practice