The Myth:A business appraisal is the same thing as an equipment or asset appraisal. The Reality:Business valuations analyze total enterprise (or equity) value — including goodwill, cash flow, risk, and intangibles — while asset appraisals focus on the resale value of physical equipment. Why It Matters:Confusing the two can result in incomplete collateral analysis or … Continue reading 📚 Valuation Myth: A Business Appraisal = Equipment Appraisal
Certified Machinery & Equipment Appraiser
📚 Valuation Myth: Projections Don’t Need Support
The Myth:Future projections are enough to justify value — no need to back them up. The Reality:Projections without clear support are just optimistic guesses. Buyers and SBA lenders need evidence — like written plans, assumptions, customer contracts, and operating history — to trust future performance claims. Why It Matters:Relying on unsupported projections can inflate value … Continue reading 📚 Valuation Myth: Projections Don’t Need Support
📚 Valuation Myth: All Valuations Are Created Equal
The Myth:As long as the report has a number, it's reliable. The Reality:Not all valuations are based on credible data, accepted methods, or professional standards. Some are biased, boilerplate, or created to hit a target. Why It Matters:Relying on a weak or non-compliant valuation can lead to poor decisions — or SBA loss of guarantee. … Continue reading 📚 Valuation Myth: All Valuations Are Created Equal
Understanding Risk and Return in Closely Held Businesses: A Guide for SBA 7(a) Lenders
Evaluating the risk and return of a business acquisition is central to SBA 7(a) underwriting. Closely held or family-controlled businesses present unique financial dynamics: opaque markets, limited liquidity, and owner concentration. These realities significantly alter their risk-return profile compared to publicly traded companies. This guide explores how SBA lenders can evaluate such businesses rigorously, using … Continue reading Understanding Risk and Return in Closely Held Businesses: A Guide for SBA 7(a) Lenders
Lender Insights: Checkpoints for SBA Underwriting
Use these short callouts as quick reminders or margin notes to help identify key risks and reinforce SBA lending best practices. Lender Insight #1 Analyze a 3-year break-even analysis and working capital needs under downside scenarios. This helps evaluate business feasibility and funding sufficiency. Lender Insight #2 If only one valuation method is used in … Continue reading Lender Insights: Checkpoints for SBA Underwriting
Working Capital Guide
Use this guide to evaluate whether working capital (WC) has been properly addressed in a business valuation and underwriting for SBA lending purposes. Step 1: Identify WC Components Accounts Receivable (AR) Inventory Accounts Payable (AP) Accrued expenses Step 2: Evaluate Treatment in Valuation Is WC included in the purchase price or treated as a separate … Continue reading Working Capital Guide
Mapping The 7 Deadly Sins of Valuation to SBA SOP & Underwriting Concerns
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
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
Top 10 Misunderstandings SBA 7(a) Lenders Have About Business Valuations
Business valuations play a pivotal role in underwriting SBA 7(a) loans, especially for business acquisitions. However, many lenders misunderstand key principles underlying valuation methodology, potentially leading to flawed underwriting, non-compliance with SBA SOP requirements, or exposure to guaranty denial risk. This white paper outlines the ten most common misunderstandings SBA lenders have about business valuations … Continue reading Top 10 Misunderstandings SBA 7(a) Lenders Have About Business Valuations
How to Prepare for a SBA 7a Business Valuation
An SBA loan appraisal can make or break a deal. Proper preparation ensures a smooth process, aligns expectations between lender and borrower, and mitigates the risk of loan denial. This paper outlines what business owners and advisors need to know before the valuation begins. 1. Understand the Appraisal Requirements SBA SOP 50 10 8 requires … Continue reading How to Prepare for a SBA 7a Business Valuation
Highland Global Business Valuations 