📘 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.

🛠️ 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

🧯 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

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

📘 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.

We reviewed a $1.7M business valuation of a manufacturing firm based on smooth cash flow. But then we asked: Who are the customers? How much of revenue comes from the top one? Answer: 72% 😳 We applied a risk discount. Value dropped ~30%. Buyer and lender restructured. Deal closed—with protection. 📌 If one customer leaves … Continue reading 📊 Case Study: 1 Customer = 72% of Revenue

🧯 Deadly Sin: Ignoring Customer Concentration Risk If one client makes up 30%+ of revenue, your cash flow has a single point of failure. Yet appraisals often: ❌ Ignore this risk❌ Apply normal multiples❌ Assume “it’ll be fine” 📌 Appraisers and SBA lenders must adjust value—or structure around it—when concentration threatens stability.

📘 We created a Franchise Valuation Checklist for SBA lenders and analysts. Includes: ✅ Common franchise-specific red flags✅ Required adjustments✅ Royalty treatment✅ Risk factors 📩 Click here to grab your copy.

🍕 A franchise showed $180K in free cash flow. But the financials didn’t include: 8% royalty 3% marketing fee Real FCF? ~$100KBuyer was overpaying—lender got nervous—deal barely closed. Don’t let brand strength blind you to contract risk.

🍔 Not all franchise deals are created equal. We’ve seen appraisals that: Apply generic multiples without royalties Ignore franchisor contract risks Overstate goodwill based on brand alone 📌 SBA-compliant appraisals must adjust for: ✅ Royalties✅ Franchise fees✅ Transfer restrictions✅ Control limitations The brand has value—but the buyer’s control of that value can be limited. And … Continue reading 🧠 Sin Spotlight: The Franchise Valuation Trap