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Business Valuation Under USPAP: A Guide for Credible and Defensible Appraisals
The Uniform Standards of Professional Appraisal Practice (USPAP) provides a rigorous framework for business valuations, ensuring ethical, competent, and transparent appraisals. While not mandatory for all valuations, such as those for Small Business Administration (SBA) 7(a) loans, USPAP compliance enhances credibility and is often adopted in regulated or high-stakes contexts like litigation, tax reporting, and … Continue reading Business Valuation Under USPAP: A Guide for Credible and Defensible Appraisals
Valuing Intangible Assets in Private Company Transactions under SBA SOP 50 10 8
Small business acquisitions often involve paying for more than just tangible assets – buyers also pay for intangible value such as brand reputation, customer loyalty, or proprietary know-how. For SBA lenders, understanding and properly valuing this intangible value is critical to prudent underwriting. Under the U.S. Small Business Administration’s SOP 50 10 8 (effective June … Continue reading Valuing Intangible Assets in Private Company Transactions under SBA SOP 50 10 8
✅ FIRREA, USPAP, and SBA SOP — What’s Required in Business Valuations?
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✅ Are You Inflating Value by Ignoring Taxes?
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Special Purpose Properties in SBA 7(a) Lending
In the realm of Small Business Administration (SBA) lending, understanding the classification and appraisal of Special Purpose Properties is crucial. These properties present unique challenges due to their specific design and limited adaptability. This article explores the SBA's definition of Special Purpose Properties, the characteristics that categorize a property as such, clarifies why appraising these … Continue reading Special Purpose Properties in SBA 7(a) Lending
Distributions and the S Corporation: Understanding Their Role in Financial Statements
Misunderstandings about S corporation shareholder distributions often arise among business owners and non-accounting professionals, particularly the belief that distributions reported on a Schedule K-1 are business expenses. This confusion can distort perceptions of cash flow, profitability, and business valuation. This paper clarifies the nature of S corporation distributions and their impact on financial statements, including … Continue reading Distributions and the S Corporation: Understanding Their Role in Financial Statements
Maintenance Capital Expenditures in Business Valuations for SBA 7(a) Lending
Accurate estimation of maintenance capital expenditures (CapEx) is critical in business valuations for SBA 7(a) loan purposes, particularly when using the capitalization of earnings method. While EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is a common valuation proxy due to its pre-debt, pre-tax simplicity, it excludes CapEx, a recurring cash outflow. This omission can … Continue reading Maintenance Capital Expenditures in Business Valuations for SBA 7(a) Lending
The Risks of Relying on Annualized Financials and Projections in SBA 7(a) Business Valuations
In SBA 7(a) loan underwriting, business valuations play a pivotal role in determining loan eligibility and appropriate risk mitigation. While projections and annualized financials can offer a forward-looking view of performance, they come with significant pitfalls—particularly when used as a basis for valuation without adequate historical context. The SBA’s Standard Operating Procedure explicitly requires lenders … Continue reading The Risks of Relying on Annualized Financials and Projections in SBA 7(a) Business Valuations
Business Valuations Under FIRREA, USPAP, and SBA SOP 50 10 8
Business valuations for SBA 7(a) and 504 loans, federally insured lending, and regulatory contexts must navigate the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), Uniform Standards of Professional Appraisal Practice (USPAP), and SBA SOP 50 10 8 (effective June 1, 2025). FIRREA governs real estate appraisals in business transactions, USPAP provides ethical and performance … Continue reading Business Valuations Under FIRREA, USPAP, and SBA SOP 50 10 8
Highland Global Business Valuations 