Most business owners think the hardest part of a sale is finding a buyer. It’s usually not.
The bigger risk shows up later: after you’ve signed a Letter of Intent, granted exclusivity, and started planning your closing, only to find out the lender doesn’t believe your earnings are what you thought they were.
Starting October 1, 2026, that risk gets a lot more real for SBA 7(a) deals.
The SBA’s new SOP 50 10 8.1 now requires an independent Quality of Earnings (QoE) report for change-of-ownership transactions with a purchase price of $3 million or more. This report has to be commissioned by the lender, not you or your buyer, and it goes far beyond a simple EBITDA add-back sheet. It includes a full Cash Proof reconciling your bank activity against your tax returns and financials, covering the trailing 12 months and the two most recent fiscal years.
Why it matters to you: the lender’s QoE findings determine your buyer’s actual borrowing capacity. If adjusted earnings come in lower than expected, you could see a reduced loan amount, a bigger equity gap, a re-traded price, or a deal that falls apart, often after months and real money spent getting there.
The owners who come out ahead are the ones who get their earnings tested before they’re in exclusivity, not after.
We break down exactly what this new rule requires, what a Cash Proof involves, and why a sell-side QoE gives you leverage instead of costing you leverage. (click here to read the full article)
Dr. Allen Nazeri, widely known as “Dr. Allen,” brings more than 35 years of global entrepreneurial and transactional experience to the middle market. He serves as Managing Director at American Healthcare Capital and Managing Partner at PRIME exits®, where he advises founders, boards, and executive leadership teams on strategic growth, value optimization, and exit readiness. Dr. Allen works with both privately held and publicly traded companies, helping them strengthen operations, enhance valuation drivers, and position their businesses for premium outcomes—whether through a full sale, recapitalization, or partial liquidity event. His approach combines operational insight with disciplined M&A execution, ensuring clients are strategically prepared long before going to market.
He earned his Doctor of Dental Surgery (DDS) degree from Creighton University and holds an MBA in Mergers & Acquisitions and Investment Banking from the University of Bedfordshire. Dr. Allen also holds the prestigious Master M&A Intermediary (M&AMI) designation, awarded to a select group of advisors who have demonstrated advanced negotiation expertise and a proven track record of closing complex, middle-market transactions. As the author of Value Engineering: Strategies to 10X the Value of Your Clinic and Dominate the Market! and the newly released Selling Your Healthcare Company at a Premium, Dr. Allen is recognized for translating sophisticated deal strategy into actionable guidance for business owners.
About Dr. Allen:
Dr. Allen Nazeri offers complimentary valuations to founders exploring partial or full exit strategies and works closely with strategic acquirers, private equity groups, and institutional investors. Each year, he directly oversees successful sell-side engagements representing more than $1 billion in aggregate enterprise value across Healthcare, Engineering, Manufacturing, Robotics, Automation, and related business services sectors.
To have a confidential discussion about your company and receive a free valuation, please Contact Dr. Allen via email Allen@ahcteam.com or Call (702) 506-3392.
