📘 New for SBA lenders:Our Rules of Thumb Red Flag Guide highlights the valuation shortcuts that don’t hold up in underwriting. Inside: ✅ When rules of thumb work🚫 When they’re dangerous📉 How to spot unjustified multiples📝 A checklist for reviewing rule-based appraisals 📩 Want the 1-page guide? Click here.

💬 “I heard these sell for 3x.” That’s what the broker said when the buyer offered $1.5M for a small commercial cleaning company. But they didn’t: Normalize free cash flow Adjust for customer concentration Account for the aging fleet Our valuation? $975K. The deal almost blew up—but the buyer got a safer price, and the … Continue reading 📊 Case Study: The Danger of “3x” Thinking

🧯 Deadly Sin: Misusing Rules of Thumb “3x earnings” is not a valuation.“4x SDE” doesn’t make it true.Even “1x revenue” is dangerous without real analysis. 🔍 Rules of thumb are starting points, not conclusions. Real valuations account for: Normalized free cash flow Working capital needs CapEx requirements Risk-adjusted discount rates 📌 If the math ends … Continue reading 🧠 Sin Spotlight: Rules of Thumb ≠ Valuation

🧾 New for SBA lenders: Our FMV vs. Strategic Value Cheat Sheet Inside:✅ Definitions and SBA SOP tie-in✅ Common examples of each✅ Red flags in strategic-heavy valuations✅ How to explain this to buyers and brokers It’s a quick-glance guide your underwriting team can use on any appraisal review. 📩 Want a copy? Click here.

📉 A lender sent us a $3.2M valuation for review. But something didn’t add up… The “valuation” assumed: A competitor buyer would gain route efficiency Back-office synergies would reduce overhead $600K in purchase premium based on “growth potential” But the buyer was new to the industry—with none of those synergies. ✅ Our fair market value … Continue reading 📊 Case Study: Strategic Value Trap

🧯 Deadly Sin: Using the Wrong Standard of Value If a valuation is based on strategic value instead of fair market value, the lender isn’t underwriting the business—they’re underwriting the buyer’s motives. Fair market value assumes: ✅ A hypothetical buyer✅ No special advantages✅ A willing seller in an open market Strategic value assumes: 💰 Synergies🚀 … Continue reading 🧠 Sin Spotlight: Wrong Standard of Value

📋 Just dropped: Our Multi-Unit Fast Food Valuation Checklist for SBA 7(a) lenders and deal reviewers. Includes: ✅ Owner labor vs. GM coverage✅ Franchise + royalty fee impact✅ Lease and location-by-location risk✅ Addbacks: car, perks, undocumented admin wages 🍔 Click here to grab your copy.

A seller priced 3 fast food units at $1.8M based on $425K in “cash flow.” But: ❌ One unit had no manager—owner floated between stores❌ $75K in addbacks = car allowance, meals, and “admin” payroll❌ Franchise + ad fees totaled 12%❌ One lease was below-market + set to expire 📉 Adjusted FCF: ~$185K🍟 Real value … Continue reading ⚠️ Red Flag Case Study: The $1.8M Franchise Fumble

🍔 Multi-unit QSRs often show high sales—but not all cash flow is created equal. Top valuation traps: Franchise royalties + ad fund fees eat margins Corporate pricing and POS limits flexibility Owner may be the only salaried manager across 3+ units Lease terms vary wildly across locations 📌 Rule of thumb: A $1M shop with … Continue reading 🧠 Valuation Insight: Multi-Unit Fast Food Franchises-Don’t Confuse Volume with Value

📋 Our Towing Valuation Checklist is now available—built for SBA lenders reviewing automotive roadside & recovery deals. Includes: ✅ Owner labor vs. full driver team✅ Fleet condition and CapEx needs✅ Addback traps: fuel cards, vehicle write-offs, family labor✅ Red flags: no rotation contract, 1-driver operation, unrecorded cash 📩 Click here to grab your copy.