The Myth:If you have a brand, your business is worth more. The Reality:Brand recognition only boosts value if it actually translates into cash flow. A well-known but unprofitable brand may not command any premium at all. Why It Matters:Valuations should measure brand strength by results — not reputation alone. Practical Tip:Quantify brand value based on … Continue reading 📚 Valuation Myth: Brand Always Adds a Premium
SBA underwriting
Business Valuation as a Range, Not a Point – Reconciling Reality with SBA Compliance
Business valuation is both an art and a science. While it relies on empirical data, financial models, and accepted methodologies, the final conclusion often involves professional judgment and assumptions. This gives rise to the concept of valuation as a range, a notion widely accepted in academic literature, professional standards, and practical appraisal work. However, when … Continue reading Business Valuation as a Range, Not a Point – Reconciling Reality with SBA Compliance
Why Fair Market Value Often Falls Short of the Purchase Price in SBA 7(a) Deals: 10 Reasons Every Lender Should Know
In SBA 7(a) business acquisitions, a common hurdle arises: the fair market value (FMV) in the business valuation report is lower than the agreed-upon purchase price. FMV represents what a hypothetical, willing buyer would pay for a business based on its current, verified financial performance. This gap can delay loan approvals, frustrate borrowers, and complicate … Continue reading Why Fair Market Value Often Falls Short of the Purchase Price in SBA 7(a) Deals: 10 Reasons Every Lender Should Know
📚 Valuation Myth: Asset Sales Don’t Require Valuations
The Myth:When selling just the assets, you don’t need a full business valuation. The Reality:Even asset sales often include goodwill/intangible assets — all of which require formal valuation analysis, especially for SBA loans and tax compliance. Why It Matters:Ignoring non-tangible value can trigger tax issues, deal disputes, and underwriting gaps. Practical Tip:Evaluate total enterprise value … Continue reading 📚 Valuation Myth: Asset Sales Don’t Require Valuations
📚 Valuation Myth: 2019 Financials Are Still Relevant Forever
The Myth:Pre-COVID numbers are the true benchmark for valuation. The Reality:Markets have shifted permanently post-2020. Buyers, lenders, and valuators prioritize current, sustainable performance over historical pre-pandemic results. Why It Matters:Using outdated financials risks overvaluing businesses that haven’t recovered or adapted. Practical Tip:Focus your valuation on proven recovery trends — not just historical highs.
📚 Valuation Myth: CapEx Doesn’t Matter in Valuation
The Myth:Maintenance capital expenditures don’t affect value. The Reality:Ignoring CapEx inflates free cash flow and overstates value. Every business has recurring investment needs — whether it's equipment, vehicles, or tech infrastructure. Why It Matters:Failing to account for CapEx misleads buyers and lenders about long-term sustainability. Practical Tip:Always subtract normalized CapEx from cash flow.
📚 Valuation Myth: Book Value Sets a Minimum Value
The Myth:A business is always worth at least its book value. The Reality:If the business isn’t profitable, or if its assets are illiquid or obsolete, the true value may fall below book. Buyers pay for income potential — not just recorded assets. Why It Matters:Using book value as a floor can lead to overvaluation — … Continue reading 📚 Valuation Myth: Book Value Sets a Minimum Value
SBA 7(a) Business Valuation Multiples Cheat Sheet
This cheat sheet provides estimated price-to-revenue (P/Revenue) and price-to-EBITDA (P/EBITDA) multiples for small businesses across various industries, based on heuristic and empirical data from transactional and valuation analyses and cross-referenced with market research. These ranges are tailored for SBA 7(a) loan valuations, focusing on businesses with revenues typically under $5M. This cheat sheet is designed … Continue reading SBA 7(a) Business Valuation Multiples Cheat Sheet
📚 Valuation Myth: A Business Appraisal = Equipment Appraisal
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
When Bigger Multiples Mislead: A Guide for SBA Lenders
Mainstream headlines and investment pitches frequently highlight multiples from public companies, private equity-backed platforms, or high-growth sectors like SaaS, where enterprise-scale premiums and optimistic growth projections push EV/revenue multiples into the 5–8× range and EV/EBITDA to 8–15× or higher. For instance, the S&P 500's average EV/EBITDA often hovers around 10–16×, reflecting benefits from low risk, … Continue reading When Bigger Multiples Mislead: A Guide for SBA Lenders
Highland Global Business Valuations 