Documents Needed to Sell a Business Without a Broker: The Checklist
If your buyer pays with an SBA 7(a) loan, Appendix 20 of SOP 50 10 8.1 puts three complete fiscal years of your statements, signed or certified within 120 days before submission to SBA, interims no older than 120 days and the purchase agreement in the lender's file, and the lender "must verify the seller’s financial data, including a selling sole proprietor’s Schedule C", against IRS transcripts. Outside an ESOP loan, the lender "may not use a business valuation prepared for the Applicant or the seller"; price above its own valuation "must be made up by equity", and a seller note can count as the buyer's equity only on full standby. In an Initial Acquisition or Business Expansion you may not remain as an officer, director, stockholder or employee, though the business may contract with you as a consultant for up to 24 months. After an asset sale of a business, both parties generally file IRS Form 8594.
General information, not legal, tax or lending advice. We are not attorneys, CPAs, a lender or a licensed business broker in any state. We do not introduce buyers or send documents to anyone. The SBA rules quoted are for 7(a) changes of ownership; worked figures assume an Initial Acquisition. Confirm with your attorney, your CPA and the buyer's lender.
What documents do you need to sell a business?
Three years of signed or certified statements and returns, recent interims, the purchase agreement, the terms of any seller note (full standby if it is to count as the buyer's equity), any consulting agreement, the lease and licenses, and, for an asset sale, your CPA's Form 8594 allocation. Without a broker, you, your attorney and your CPA assemble them.
| Document | Why it matters | Where the rule is |
|---|---|---|
| Three complete fiscal years of statements, signed or certified within 120 days before submission to SBA | Analyzed at the highest level available: audited, reviewed, compiled, tax returns | Appendix 20; Appendix 15, Lender's Credit Analysis |
| Tax returns for those years (Schedule C for a sole proprietor) | Verified against IRS transcripts | Section A, Ch. 5, Para. B |
| Interims no older than 120 days, plus last year's same period | In the application; compared in the analysis | Appendix 20; Appendix 15, Lender's Credit Analysis |
| Add-back schedule, with support for each item | Unsupported adjustments are ineligible | Appendix 15, Adjusted Debt Service Coverage |
| Bank statements, trailing 12 months and two fiscal years (Quality of Earnings deals only) | The QoE Cash Proof reconciles bank data to the income statement and tax return | Appendix 15, Quality of Earnings |
| Purchase agreement with all schedules and amendments | Loan documentation and application | Appendix 15; Appendix 20 |
| Asset list, and the Form 8594 allocation (your CPA) | Appendix 20 puts a "detailed listing of all assets purchased with loan proceeds" in the lender's file (7(a) Small and SBA Express: only to the extent necessary); the allocation is a tax filing, and a written allocation binds both parties | Appendix 20; 26 U.S.C. 1060 |
| Terms of any seller note | Only a note on full standby can count as the buyer's equity | Appendix 15, Seller Debt |
| Any consulting agreement: 24 months at most; no officer, director, stockholder or employee role | Initial Acquisition, Business Expansion | Appendix 15, Change of Ownership Requirements |
| Price terms with no seller earnout (buyer rebates allowed) | All 7(a) changes of ownership | Appendix 15, Change of Ownership Requirements |
| Lease | Copy in the application | Appendix 20 |
| Licenses and permits | Transferable ones secured as collateral; all evidenced within 90 days after final disbursement | Appendix 15; Section B, Ch. 6 |
| CIM and blind teaser | No federal rule we read prescribes them; figures must tie to the returns | None |
Appendix 15 also requires "A site visit for the Applicant and for the business being acquired", or, with no physical location, documented steps to verify operations. Your attorney's transaction papers, such as the letter of intent and bill of sale, are outside this list.
If the buyer uses an SBA 7(a) loan, what does the buyer's lender need from you?
Statements and returns that match your IRS transcripts. Appendix 20's three years of seller statements "must be dated and either signed or certified by the seller within 120 days prior to submission to SBA", interims may be no older than 120 days, and without statements "the seller must provide an alternate source of verifying revenues". Section A, Chapter 5:
For a change of ownership, the SBA Lender must verify the seller’s financial data, including a selling sole proprietor’s Schedule C.
Add-backs need support: "Adjustments to cash flow without the Lender’s supporting analysis and justification will be ineligible" for coverage.
Will the buyer's lender use your valuation, and what if its own comes in low?
Outside an ESOP loan, no, and any price above the lender's valuation becomes the buyer's equity. For an ESOP loan the lender "may use the valuation obtained by the ESOP" (Section A, Ch. 2, Para. B). Otherwise, Appendix 15:
the business valuation must be requested by and prepared for the Lender. The Lender may not use a business valuation prepared for the Applicant or the seller.
The Business Purchase Price (the contract price less the appraised value of any owner-occupied commercial real estate) sets the valuation tiers (SBA business valuation requirements). At $3 million or more in an Initial Acquisition or Business Expansion the lender must also obtain a Quality of Earnings report, which "must not be prepared by or for the seller"; none is required to buy an owner-occupied Special Purpose Property, at any price.
Two rules price the gap: "If the amount paid for the business exceeds the business valuation, the difference must be made up by equity." And total debt "(including seller debt that is not on full standby) is limited to the business valuation amount".
Illustration, figures assumed: an Initial Acquisition asset sale with no real estate. Equity is "Initial Acquisition: 10%" of total project cost and "cannot be reduced or eliminated".
| Line | Amount | Rule |
|---|---|---|
| Price, also the Business Purchase Price | $1,000,000 | Under $3 million, so no QoE |
| Working capital and closing costs | $100,000 | In total project cost |
| Total project cost | $1,100,000 | 1,000,000 + 100,000 |
| Minimum equity, 10 percent | $110,000 | Not waivable |
| Limited sources, at most | $55,000 | Half of 110,000 |
| 7(a) loan if the structure holds | $990,000 | 1,100,000 less 110,000 |
| Lender's valuation | $950,000 | Prepared for the lender |
| Price above valuation, must be equity | $50,000 | 1,000,000 less 950,000 |
| Debt cap, whole loan and any non-standby seller note (our reading) | $950,000 | The valuation amount |
| Loan over the cap | $40,000 | 990,000 less 950,000 |
| Equity if the gap sits inside the minimum | $150,000 | 1,100,000 less 950,000; loan $950,000 |
| Equity if the gap sits on top of it | $160,000 | 110,000 + 50,000; loan $940,000 |
The SOP text we read does not say whether the $50,000 gap sits inside or on top of the 10 percent minimum, so the table shows both; confirm the treatment with your lender. Limited sources may fill a price above the supported value, but "any additional funds provided must be on full standby".
Our Pricing Analysis is not that valuation; it shows the debt a 7(a) buyer could service at 1.25:1 on your historical earnings (how to price a business for an SBA buyer).
Can you finance part of the price with a seller note?
Yes, but it can count as the buyer's equity only on full standby; otherwise it is debt, inside the valuation cap and the coverage test. Appendix 15:
Seller debt that is subordinated to the Lender and on full standby (no payments of principal or interest for the term of the 7(a) loan) may be considered as equity for SBA’s purposes.
The lender "must use SBA Form 155 or its own equivalent Standby Agreement form". Standby seller debt is a limited source, and limited sources "may provide no more than half of the required Equity Injection" (SBA equity injection requirements).
A note paid during the loan counts in coverage: "Initial Acquisition: 1.25:1", on the last fiscal year or a two-year average "on either a historical or adjusted basis", not on projections, except in buying an owner-occupied Special Purpose Property whose appraised value fully collateralizes the loan, where the ratio must be met within two years of funding (SBA debt service coverage requirements). Illustration, figures assumed, monthly payments, ten years at 10.0 percent (an arithmetic input, not a rate quote): on historical EBITDA of $190,000, a $950,000 7(a) loan costs $150,651.84 a year, coverage $190,000 / $150,651.84 = 1.26. Split it into an $850,000 loan ($134,793.72 a year) and a $100,000 seller note at 6 percent over five years, paid during the loan ($23,199.36 a year), and debt service is $157,993.08: coverage $190,000 / $157,993.08 = 1.20, below 1.25. Total debt stays at the $950,000 cap and equity at $150,000 (if the gap sits on top of the minimum, $160,000 of equity leaves $940,000 for the loan and note). On full standby the note adds no debt service during the loan.
Can you stay on after the sale?
Not as an officer, director, stockholder or employee in an Initial Acquisition or Business Expansion, though you may consult for up to 24 months:
Except as provided below, the seller in a Business Expansion or Initial Acquisition change of ownership transaction may not remain as an officer, director, stockholder, or employee of the business. If a transitional period is needed to assist the business, the small business may contract with the seller as a consultant for a period not to exceed 24 months (in aggregate, including any extensions).
Initial Acquisition is the default category (SBA loan to buy a business). In a partial Owner Buyout, where an original owner keeps a stake, you may stay, but a selling owner left under 20 percent "must provide a full guaranty for the full loan amount pursuant to 13 CFR 120.160(a)", for at least two years after final disbursement.
In any 7(a) change of ownership, "Seller earnouts are prohibited; however, buyer rebates based on business performance are allowed"; a working capital true-up is not a rebate.
What is IRS Form 8594 and who files it?
It is the Asset Acquisition Statement Under Section 1060, and generally both of you file it after an asset sale of a group of assets that makes up a trade or business. The instructions (Rev. November 2021): "Generally, both the purchaser and seller must file Form 8594 and attach it to their income tax returns" for "the year in which the sale date occurred", and "You are required to enter the TIN of the other party." Exceptions include a section 1031 like-kind exchange and a transfer of a partnership interest. Under 26 U.S.C. 1060, an allocation the parties agree in writing "shall be binding on both the transferee and transferor unless the Secretary determines that such allocation (or fair market value) is not appropriate".
Your CPA prepares the form from the asset list and the agreed allocation.
What goes in the CIM, the blind teaser and the data room index?
No federal rule we read prescribes a CIM or a teaser, but your figures are checked against IRS transcripts, so the CIM's financials must tie to your returns. Ours has fifteen to twenty sections, plus a blind teaser and a data room index keyed to the table above (what goes in a CIM).
You decide who receives each document. All our documents: exit and acquisition documents.
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 verified this
Quotations checked against raw text retrieved on 30 October 2026; arithmetic recomputed in Python.
- SBA SOP 50 10 8.1, effective 1 October 2026, the 7 October 2026 file (.docx; SOP 50 10 page): Appendix 20 (seller documents, asset listing); Appendix 15 (valuation, equity, debt cap, standby, coverage, QoE, Special Purpose Property, staying on, guaranty, earnouts); Section A, Chapter 2 (ESOP valuation); Section A, Chapter 5 (transcripts); Section B, Chapter 6 (licenses).
- 26 U.S.C. 1060 (Legal Information Institute), for the binding written allocation; a Federal Register search found no rule on section 1060 reporting since 1 January 2025.
- IRS Form 8594 instructions (Rev. November 2021), current per the About Form 8594 page, for who files, the exceptions, timing and the TIN.
Not verified, so not on this page: state broker licensing, lease assignability, who signs the transcript authorization, any fees (none surveyed) and lender practice beyond the SOP; and whether equity covering a price above the valuation sits inside or on top of the 10 percent minimum.
Frequently asked questions
What does an SBA buyer's lender need from the seller?
Under Appendix 20 of SOP 50 10 8.1, the lender's file includes three complete fiscal years of the seller's statements, signed or certified within 120 days before submission to SBA, interims no older than 120 days and the purchase agreement. Section A, Chapter 5 requires the seller's data to be verified against IRS transcripts.
What else does an SBA buyer's lender check besides my statements?
Under Appendix 15 of SOP 50 10 8.1, the buyer's SBA 7(a) lender needs a site visit for the business being acquired, and where a Quality of Earnings report is required, at $3 million or more in an Initial Acquisition or Business Expansion other than an owner-occupied Special Purpose Property purchase, its Cash Proof reconciles bank statements to the income statement and tax return.
Can I carry back a seller note when selling to an SBA buyer?
Yes, but only on full standby does it count as the buyer's equity. Under Appendix 15 of SOP 50 10 8.1, seller debt subordinated to the lender, with no payments of principal or interest for the 7(a) loan's term, may be considered equity, on SBA Form 155 or the lender's equivalent, up to half the required injection with other limited sources.
Can I stay on after selling to an SBA-financed buyer?
Not as an officer, director, stockholder or employee in an Initial Acquisition or Business Expansion under Appendix 15 of SOP 50 10 8.1, though the business may contract with you as a consultant for up to 24 months in aggregate. Seller earnouts are prohibited in any 7(a) change of ownership. In a partial Owner Buyout you may stay.
Who files IRS Form 8594 after a business sale?
Generally both purchaser and seller, after an asset sale of a group of assets that makes up a trade or business. Under the Form 8594 instructions (Rev. November 2021) each attaches it to its income tax return for the year of the sale and enters the other party's TIN; exceptions include a partnership interest transfer. Your CPA prepares it.
General information from SBA SOP 50 10 8.1, 26 U.S.C. 1060 and the Form 8594 instructions, retrieved 30 October 2026; not legal, tax or lending advice. Confirm with your attorney, your CPA and the buyer's lender.