Pricing Analysis for Selling a Business: An Indicative Valuation Range, $1,250
Our Pricing Analysis is a $1,250 fixed-fee document, delivered in 7 business days, giving an owner an indicative valuation range and a financeability check; it is not an independent business valuation for SBA 7(a) or any lender's purposes. Under Appendix 15 of SOP 50 10 8.1, outside ESOP loans, "The Lender may not use a business valuation prepared for the Applicant or the seller". A 7(a) buyer's total debt is capped at the lender's valuation, any amount paid above it "must be made up by equity", and an Initial Acquisition must show 1.25:1 coverage on year-end earnings, historical or adjusted.
General information, not legal, tax, lending or valuation advice. The rules quoted are the SBA 7(a) change of ownership rules in Appendix 15 of SOP 50 10 8.1; confirm your sale with your attorney, CPA and the buyer's lender.
What is a Pricing Analysis, and who is it for?
It is an indicative valuation range and financeability check for an owner who wants to know, before setting an asking price, how much debt an SBA 7(a) buyer could service. It is one of our three exit and acquisition documents.
We do not currently offer the Pricing Analysis for a business located in Florida, and we ask which state the business is in before we quote. State licensing rules differ.
What do you receive?
A PDF and the workbook behind it, in six sections:
| Section | What it contains |
|---|---|
| Normalized earnings | Three years of seller's discretionary earnings and EBITDA from management-supplied statements and tax returns, with a tie-out schedule. |
| Indicative range | Methods agreed in advance: named market multiples with their published source and date, capitalization of earnings, an asset-based floor. |
| Sensitivity table | How the range moves as inputs change. |
| Financeability check | The debt an SBA 7(a) buyer could service at 1.25:1 on historical earnings at a stated rate and term, and the equity needed above it. |
| Inputs we relied on | The documents the figures rest on. |
| Cover statements | The wording in the section on what it is not. |
What does it cost, and how long does it take?
$1,250, fixed, in 7 business days.
| Fee | Turnaround | Included |
|---|---|---|
| $1,250, fixed | 7 business days | The six sections above, as a PDF and workbook |
Our Standard financial model is also $1,250 but projects five years forward for someone raising; the Pricing Analysis looks back at a seller's three years of returns.
What is it not?
The Pricing Analysis sets out an indicative range for the business as a going concern, using methods agreed with you in advance and information supplied by management. It is not an appraisal, an opinion of value or a conclusion of value. It is not prepared under USPAP or the AICPA Statement on Standards for Valuation Services. It is not an independent business valuation for SBA 7(a) or any lender's purposes: under SOP 50 10 8.1 the lender's valuation "must be requested by and prepared for the Lender", and "The Lender may not use a business valuation prepared for the Applicant or the seller". It does not recommend buying, selling or holding any shares, or accepting any offer.
Which SBA 7(a) rules does the financeability check apply?
These Appendix 15 rules limit what a 7(a) buyer can borrow.
The valuation is the lender's, and the lender must check the valuation analyst's financial inputs "against the seller’s IRS transcripts". Who may prepare it: SBA business valuation requirements.
The debt cap. Total debt, including a seller note not on full standby, "is limited to the business valuation amount", and any price above the valuation "must be made up by equity".
The coverage test. It uses "either the last fiscal year-end or an average of the last two fiscal year-end statements on either a historical or adjusted basis": "Initial Acquisition: 1.25:1", "Business Expansion: 1.15:1". Historical means EBITDA over post-closing debt service; adjustments, ownership compensation among them, are the lender's, and "The justification for each adjustment or add-back must be included in the credit memorandum". Post-closing projections are evaluated, but the lender "may not rely on them to meet the DSC requirement", except for an owner-occupied Special Purpose Property integral to the business whose appraised value fully collateralizes the loan, with the ratio met within two years of funding.
The equity floor. Equity is measured on total project cost: "Initial Acquisition: 10%", which "cannot be reduced or eliminated". At a Purchase Price of $3 million or more in an Initial Acquisition or Business Expansion, other than an owner-occupied Special Purpose Property acquisition, the lender must also obtain a Quality of Earnings report and use its earnings for coverage. Loan rules: SBA loan to buy a business.
What does the financeability check show about how much of the price a buyer can borrow?
On the assumptions below, $300,000 of adjusted EBITDA could service $1,513,423.27 of debt at 1.25:1 and a $1,500,000 ask passes coverage, but at a $1,300,000 lender's valuation the buyer needs $300,000 of equity if the $200,000 gap counts toward the minimum, or $360,000 if it sits on top; the SOP text we read does not say which, so confirm the treatment with your lender.
Illustration, figures assumed. An Initial Acquisition with no real estate, last fiscal year-end figures, 10.0 percent (an arithmetic input, not a rate quote) over 10 years, the maximum, since the loan "must not have an amortization that exceeds 10 years"; no seller note or other debt. Full method: how to price a business for an SBA buyer.
| Step | Amount |
|---|---|
| Seller's discretionary earnings, tied out to the returns | $400,000 |
| Less compensation the buyer must draw (assumed) | $100,000 |
| Adjusted EBITDA (our normalization; only adjustments the lender justifies count) | $300,000 |
| Maximum annual debt service, $300,000 / 1.25 | $240,000 |
| Debt the earnings can service: $20,000 a month × 75.67116337 (120 payments at 10.0 percent / 12) | $1,513,423.27 |
| Asking price, also the Business Purchase Price (assumed) | $1,500,000 |
| Total project cost, adding $100,000 of working capital and closing costs | $1,600,000 |
| Minimum equity, 10 percent | $160,000 |
| Annual debt service on a $1,440,000 loan ($1,600,000 less $160,000), $1,440,000 / 75.67116337 × 12 | $228,356.47 |
| Coverage, $300,000 / $228,356.47 | 1.314 |
| Lender's valuation (assumed) | $1,300,000 |
| Price above valuation, must be equity | $200,000 |
| Equity if the gap counts toward the minimum, whole loan capped at $1,300,000 (our reading) | $300,000 |
| Equity if the gap sits on top of the minimum: $160,000 + $200,000; debt $1,240,000 | $360,000 |
What do we need from you?
- Three years of business tax returns and year-end statements, with year-to-date interims.
- Owner compensation and each add-back, with support.
- The asset list, debt against it, and the lease.
- Whether owner-occupied real estate is in the sale (it is excluded from the Business Purchase Price).
- The state the business is in, and the methods to apply.
Our Pricing Analysis is $1,250, a confidential information memorandum with blind teaser and data room index $2,800, and an acquisition business plan $1,800, or $2,800 with the acquisition model, all fixed. We never charge a percentage of anything you borrow, invest, raise or sell, and no part of our fee depends on a transaction completing. Every price we charge is on one page: /pricing.
Business Plan Firm is the US practice of Avvale, a London consultancy. We have written 1,000+ plans for 500+ founders across 30+ countries, and our clients have raised $500M+.
How we work, and what we do not do
Business Plan Firm is the US practice of Avvale Ltd, a London management consultancy. We are not authorized or regulated by the UK Financial Conduct Authority, not registered with the SEC or FINRA, and not a licensed business broker, real estate broker, investment adviser or appraiser in any state. We prepare documents on your instructions from information you supply. We do not introduce buyers or sellers, solicit offers, negotiate, hold funds or bind any party. You decide who receives any document we prepare, and you are responsible for the law that applies to sending it. Our fees are fixed before work starts, payable whether or not any transaction completes, and never calculated by reference to any amount raised, borrowed, paid or sold. We do not advise on whether to structure a sale as shares or assets, on the merits of any security, or on whether to accept any offer; those are matters for your attorney, your CPA and, where needed, a registered adviser.
How we verified this
Every quotation was checked character for character against SBA's Word file, retrieved 30 October 2026.
- SBA SOP 50 10 8.1, effective 1 October 2026, from SBA's SOP 50 10 page (last updated 7 October 2026): Appendix 15 for every rule quoted.
- Federal Register, SBA documents published 1 September to 30 October 2026, read by title and abstract: none touches Appendix 15 or business valuation.
Not verified, so not on this page: others' fees for a business valuation or QoE report; any market multiple; lender rates, which change, so 10.0 percent is an arithmetic input.
Frequently asked questions
Is a Pricing Analysis a business valuation?
No. Our Pricing Analysis is an indicative valuation range with a financeability check, prepared for you, not an appraisal, opinion of value or conclusion of value. Under Appendix 15 of SOP 50 10 8.1, outside ESOP loans, the lender may not use a business valuation prepared for the buyer or seller.
What does the Pricing Analysis financeability check show?
It shows the debt your adjusted earnings could service at 1.25:1, the Initial Acquisition ratio in Appendix 15 of SOP 50 10 8.1, and the equity needed above it, since total debt is capped at the lender's valuation. Our illustration: $300,000 of adjusted EBITDA services $1,513,423.27 of debt at an assumed 10.0 percent over 10 years.
Why does the check use year-end earnings, not the buyer's projections?
Because Appendix 15 of SOP 50 10 8.1 says the lender may not rely on post-closing projections to meet the coverage requirement, except for an owner-occupied Special Purpose Property integral to the business whose appraised value fully collateralizes the loan, with the ratio met within two years of funding. The ratio is 1.25:1 for an Initial Acquisition.
How does the Pricing Analysis differ from the Standard financial model?
Both are $1,250, fixed. The Standard financial model projects five years forward for someone raising; the Pricing Analysis looks back at a seller's three years of statements and returns, gives an indicative range and runs a financeability check at 1.25:1.
Do you offer the Pricing Analysis in every state?
No. We do not currently offer the Pricing Analysis for a business located in Florida, and we ask which state the business is in before we quote; state licensing rules differ. The fee is $1,250, fixed, and the turnaround 7 business days.
This page summarizes Appendix 15 of SBA SOP 50 10 8.1 as retrieved 30 October 2026. It is general information, not advice or a recommendation to buy, sell or accept any offer.