business valuations

Mapping The 7 Deadly Sins of Valuation to SBA SOP & Underwriting Concerns

~ Certified Business Appraiser

Use this matrix to connect valuation red flags with SBA SOP requirements and underwriting risk categories. Deadly SinSBA SOP 50 10 8 / Underwriting ConcernWhy It Matters1. Confusing Fair Market Value with Strategic ValueSBA requires FMV standardStrategic value misleads stakeholders and may result in overvaluation unsupported by market participants.2. Incorrect Adjustments to Financial StatementsAffects global … Continue reading Mapping The 7 Deadly Sins of Valuation to SBA SOP & Underwriting Concerns

Strategic Creep Review Tool

~ Certified Business Appraiser

Use this tool to identify when a purchase price or business valuation has drifted from Fair Market Value (FMV) into buyer-specific strategic assumptions. FMV vs. Strategic Value Recap FMV = Value to a hypothetical buyer in an open market Strategic Value = Value to a specific buyer based on synergies or integration Red Flag Phrases … Continue reading Strategic Creep Review Tool

✅ WACC ≠ Cost of Equity — And Why That Matters

~ Certified Business Appraiser

💬 WACC and cost of equity are not interchangeable. When there’s debt in the capital structure, using the wrong one can sink your valuation. Here’s how to tell the difference—and get it right. 👉 Explore our white paper on WACC vs. Cost of Equity

✅ Is Your Valuation Model Tax-Affected? It Should Be.

~ Certified Business Appraiser

💬 Pass-through entities don’t pay taxes at the corporate level—but does that mean we should value them as if taxes don’t exist? Nope. Here’s why ignoring tax-affecting can seriously overstate value. 👉 Download the white paper on Tax Affecting Pass-Through Income

✅ Risk and Return — What SBA Lenders Must Understand

~ Certified Business Appraiser

💬 Higher returns only come with higher risk. But are your valuations quantifying that risk properly? Here's how risk impacts cap rates and value — explained clearly for lenders. 👉 Download the white paper discussing Risk and Return as it applies to SBA 7a business valuations.

✅ Machinery & Equipment Appraisals in SBA Lending — When Are They Required?

~ Certified Business Appraiser

💬 If your loan package includes significant hard assets, a business valuation alone may not cut it. Here’s when lenders generally engage an M&E appraisal. 👉 Read our white paper on Machinery & Equipment Valuation for SBA Loans

✅ How to Treat Rent When Business and Real Estate Are Acquired Together

~ Certified Business Appraiser

💬 When a buyer is acquiring both the business and the building, what rent should be used in the valuation? The answer matters. A lot. 👉 Check out our white paper on Normalizing Rent for SBA Transactions

✅ Discount for Lack of Marketability – Even for Controlling Interests

~ Certified Business Appraiser

💬 DLOM isn’t just for minority stakes. Controlling interest or not, a private company without a liquid market deserves a discount. Here’s why — and how to apply it. 👉 Read the full DLOM white paper

✅ FIRREA, USPAP, and SBA SOP — What’s Required in Business Valuations?

~ Certified Business Appraiser

💬 Three different rulebooks. One valuation. Are your appraisals meeting the right standard for SBA lending? Here’s how to make sense of FIRREA, USPAP, and SBA SOP. 👉 Check out our comparison white paper

✅ Are You Inflating Value by Ignoring Taxes?

~ Certified Business Appraiser

💬 There’s no such thing as a ‘tax-free return.’ If you’re using a market-based cap rate on untaxed S-corp income, you’re overstating value. Let’s fix that. 👉 Get the full breakdown in our white paper on tax-affecting income