Relocating an established restaurant in an urban U.S. market is a complex endeavor that can significantly affect the business’s valuation. Whether the restaurant is an independent eatery or part of a franchise chain, moving to a new location introduces operational disruptions and financial uncertainties that valuation professionals must carefully consider. This white paper analyzes how … Continue reading The Impact of Restaurant Relocation on Business Valuation
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Discount for Lack of Marketability in the Valuation of Controlling Interests in Privately Held Companies
Marketability—the ability to convert an asset to cash quickly with minimal value loss—is a critical factor in business valuation. Privately held companies, lacking public market access, often require a Discount for Lack of Marketability (DLOM). While commonly associated with minority interests, DLOM is also relevant for controlling interests, though its application is more nuanced. This … Continue reading Discount for Lack of Marketability in the Valuation of Controlling Interests in Privately Held Companies
🎁 Resource Drop: FMV vs Strategic Value Review Tool
📘 We created a Strategic Creep Review Tool to help lenders identify when a valuation drifts from FMV. It includes: ✅ Common language that signals strategic assumptions✅ Questions to ask your appraiser✅ SBA compliance red flags 📩 Click here to grab your copy.
Leasehold Improvements in Business Valuation: Sunk Costs or Transferable Value?
Leasehold improvements—such as customized build-outs or interior upgrades made by a tenant to a leased space—are a common feature of business operations, especially in retail, healthcare, and food service sectors. But when it comes to valuing a business for acquisition or SBA lending, how should these improvements be treated? This white paper explores the nature … Continue reading Leasehold Improvements in Business Valuation: Sunk Costs or Transferable Value?
Understanding Global Cash Flow in SBA 7(a) Loan Underwriting vs. Free Cash Flow in Business Valuations
SBA 7(a) loan underwriting relies on global cash flow (GCF) to assess the collective repayment ability of borrowers and guarantors, while business valuations for SBA 7(a) acquisition loans focus on free cash flow (FCF) to determine a business’s stand-alone value. This white paper clarifies the distinctions, purposes, and reasons GCF cannot justify higher valuations, emphasizing … Continue reading Understanding Global Cash Flow in SBA 7(a) Loan Underwriting vs. Free Cash Flow in Business Valuations
📊 Case Study: The “Perfect Fit” Problem
🛠️ A buyer wanted to roll up a local competitor.The broker used a 4x multiple because of projected cost savings post-close. But those savings: ❌ Wouldn’t apply to anyone else❌ Didn’t exist on paper❌ Violated FMV standards We valued it using historical cash flow for the SBA 7a loan. Deal got restructured. Everyone won—but the … Continue reading 📊 Case Study: The “Perfect Fit” Problem
🧠 Sin Spotlight: Valuation Built for That Buyer
🧯 Deadly Sin: Valuing for a Specific Buyer (a.k.a. Strategic Drift) When a valuation includes: 💼 Synergy from the buyer's operations📈 Growth from the buyer's network🚪 Savings from shared space... …it’s not fair market value. It’s strategic value—and it violates SBA requirements. 📌 If the value only works for one buyer, it’s not supportable in … Continue reading 🧠 Sin Spotlight: Valuation Built for That Buyer
Valuation Strategies for M&A Success
In mergers and acquisitions (M&A), valuation is a strategic linchpin, not merely a mathematical exercise. A well-executed valuation aligns buyer and seller expectations, secures financing, and drives deal closure. This white paper outlines advanced strategies to optimize M&A outcomes, integrating robust modeling, scenario planning, and due diligence preparation, supported by current industry insights and best … Continue reading Valuation Strategies for M&A Success
🧠 Fair Market Value vs. Strategic Value
Not all valuations are created equal.There’s a critical difference between fair market value and strategic value—especially in SBA 7(a) lending. ✅ Fair Market Value assumes a hypothetical buyer with no special motivations.🤝 Strategic Value reflects what a specific buyer might be willing to pay for their own reasons (synergies, territory, IP, etc.). 💡 If you’re … Continue reading 🧠 Fair Market Value vs. Strategic Value
🎁 Resource Drop: Customer Concentration Discount Guide
📘 Our Customer Concentration Discount Guide gives lenders the tools to adjust for risk properly. Includes: ✅ Industry-adjusted risk levels✅ Sample discount scenarios✅ How to discuss with borrowers 📩 Click here to grab your copy.
Highland Global Business Valuations 