Exit and Acquisition Documents for Business Sales and SBA-Financed Purchases
On an SBA 7(a) loan to buy a business (ESOP transactions aside), Appendix 15 of SOP 50 10 8.1 says 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", and "If the amount paid for the business exceeds the business valuation, the difference must be made up by equity". Total debt, including a seller note not on full standby, is "limited to the business valuation amount". Coverage is tested on history, not projections (one narrow Special Purpose Property exception aside): 1.25:1 for an Initial Acquisition or Owner Buyout, 1.15:1 for a Business Expansion, with the seller's figures checked against IRS transcripts. Our three fixed-fee documents are built to reconcile to the seller's tax returns: a Pricing Analysis ($1,250), a CIM package ($2,800) and an acquisition business plan ($1,800, or $2,800 with the model).
This is general information, not legal, lending, tax or valuation advice, and we are not lenders, appraisers, business brokers or attorneys. The rules quoted govern SBA 7(a) changes of ownership other than ESOP transactions, under Appendix 15 of SOP 50 10 8.1, effective 1 October 2026. Appendix 15 sets minimums; your lender's credit policy sits on top. Take the purchase agreement and seller note to your attorney and CPA.
What documents does a business sale or an SBA-financed purchase need?
Two sets, which meet at the buyer's lender.
| Document | Who needs it | Our product | Fee | More |
|---|---|---|---|---|
| Normalized earnings tied to three years of returns; indicative range; financeability check at 1.25:1 | Seller, before setting an ask | Pricing Analysis | $1,250 | Pricing Analysis |
| Confidential information memorandum, blind teaser, data room index | Seller, for buyers the seller chooses | CIM package | $2,800 | CIM package |
| Acquisition business plan: seller history tied to transcripts, coverage schedule, sources and uses; optional model | Buyer, for the lender's file | Acquisition Business Plan | $1,800; $2,800 with the model | Acquisition plan |
| Business valuation; Quality of Earnings report (Initial Acquisition or Business Expansion, $3 million or more, except owner-occupied Special Purpose Property purchases) | The lender | Not ours | Not surveyed | Valuation rules |
| Tax returns and statements; purchase agreement, seller note, standby agreement | Both parties, through CPA and attorney | Not ours | Not applicable | Documents checklist |
Appendix 15 measures its price thresholds on the Business Purchase Price, which "excludes all owner-occupied commercial real estate assets being acquired in the transaction".
What is the Pricing Analysis?
A $1,250 document in 7 business days for a seller setting an ask: three years of normalized earnings tied out to the returns, an indicative range under methods agreed in advance, a sensitivity table, and the debt an SBA 7(a) buyer could service at 1.25:1 on historical earnings, with the equity needed above it, delivered as a PDF and workbook.
Its cover carries this statement. 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.
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. Full scope: Pricing Analysis.
What is in the CIM package?
A $2,800 package in 10 business days: a confidential information memorandum of fifteen to twenty sections whose financial summary ties to the tax returns, a one to two page blind teaser with no identifying details, and a data room index of the documents a buyer's SBA lender asks for, keyed to SOP 50 10 8.1. You decide who receives each document; we never send it to anyone. Contents: CIM package.
What is the Acquisition Business Plan?
The buyer's document for an SBA 7(a) purchase: $1,800 in 7 business days with your own financial model, or $2,800 in 10 business days with our acquisition model (built on our $1,250 Standard financial model, with base, downside and upside cases). Appendix 15 never uses the words business plan (see does the SBA require a business plan?), so the plan follows the lender's credit analysis there: the seller's three years on the highest level of reporting, justified add-backs, coverage on history, and working capital over the next 12 months, with the seller's figures tied to IRS transcripts. We add sources and uses and an equity-gap check, and show projections without relying on them. Scope: Acquisition Business Plan.
What do the SBA rules mean for a seller?
For an SBA-financed buyer, debt is capped at the lender's valuation, and the figures behind it are checked against your tax returns.
The valuation belongs to the lender. A valuation you pay for to support your ask is one the buyer's lender may not use. "If the Business Purchase Price is $350,000 or less, the Lender may perform its own valuation of the business being sold, unless there is a close relationship between the buyer and seller". On who may perform it and how far that sentence reaches: our SBA business valuation requirements guide and the acquisition loan page.
Your figures are verified. 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". Appendix 15 has the lender check what the valuation analyst relied on "against the seller’s IRS transcripts to ensure the accuracy of the information". Our earnings schedules therefore tie out to the returns. Where a Quality of Earnings report is required, it "must not be prepared by or for the seller".
Your note, your exit, your earnout. Seller debt "that is subordinated to the Lender and on full standby" (no payments for the loan's term) "may be considered as equity for SBA’s purposes", on SBA Form 155 or the lender's equivalent. In an Initial Acquisition or Business Expansion the seller "may not remain as an officer, director, stockholder, or employee of the business", though the business may contract with the seller as a consultant "for a period not to exceed 24 months (in aggregate, including any extensions)". And "Seller earnouts are prohibited". Full list: our documents checklist for selling without a broker.
What do the SBA rules mean for a buyer?
The lender's valuation ties price, debt and equity together, and coverage is proved on the seller's history.
The equity gap and the debt cap. Any price above the valuation "must be made up by equity", and total debt, seller debt not on full standby included, is capped at the valuation. For an Initial Acquisition, equity is measured on total project cost, and the minimum reads "Initial Acquisition: 10%", which "cannot be reduced or eliminated". Which sources count: our equity injection requirements page.
Coverage on history. The ratio "must be satisfied using either the last fiscal year-end or an average of the last two fiscal year-end statements on either a historical or adjusted basis based on the transaction type": "Initial Acquisition: 1.25:1", "Business Expansion: 1.15:1", "Owner Buyout: 1.25:1". The lender "may not rely on" post-closing projections to meet it, and unsupported add-backs are ineligible. The exception, an owner-occupied Special Purpose Property integral to the business, lets the lender rely on projections where the appraised value "fully collateralizes the loan", with the ratio met within two years of funding. More: our debt service coverage page.
Worked example. Figures assumed: Initial Acquisition, no real estate, 10.0 percent (an arithmetic input, not a rate quote) over 10 years, as a change of ownership loan "must not have an amortization that exceeds 10 years" outside Special Purpose Properties.
| Line | Amount | Rule applied |
|---|---|---|
| Price agreed, also the Business Purchase Price | $1,200,000 | No real estate in the transaction |
| Lender's business valuation (assumed) | $1,100,000 | Requested by and prepared for the lender |
| Difference | $100,000 | Must be made up by equity |
| Most the lender can count as debt (on our reading, the whole loan) | $1,100,000 | Limited to the business valuation amount |
| Working capital and closing costs | $100,000 | Part of total project cost |
| Total project cost | $1,300,000 | 1,200,000 + 100,000 |
| Minimum equity injection, 10 percent | $130,000 | Cannot be reduced or eliminated |
| Equity if the gap counts toward the minimum | $200,000 | 1,300,000 less the 1,100,000 cap |
| Equity if the gap sits on top of the minimum | $230,000 | 130,000 + 100,000; debt 1,070,000 |
| Annual debt service on the full $1,100,000 | $174,438.96 | 12 x $14,536.58 (120 monthly payments) |
| EBITDA needed, after adjustments the lender can justify | $218,048.70 | 1.25 x 174,438.96, Initial Acquisition |
| EBITDA needed if the deal were a Business Expansion | $200,604.80 | 1.15 x 174,438.96 |
With debt capped at $1,100,000, the buyer needs at least $200,000 of equity. Whether the $100,000 gap counts toward the 10 percent minimum or sits on top of it, for $230,000, is not stated in the SOP text we read; confirm with your lender. Where an Initial Acquisition or Business Expansion, other than an owner-occupied Special Purpose Property purchase, has a Purchase Price that "is equal to or greater than $3 million", measured "before the application of buyer equity, seller debt, or other financing sources", the lender must also obtain a Quality of Earnings report.
Which guides go deeper?
- SBA business valuation requirements: who may perform it and the $350,000 tier.
- How to price a business so an SBA buyer can finance it: working back from earnings to a financeable price.
- What goes in a business acquisition plan for an SBA loan: the SOP names no contents, so the plan follows the lender's analysis.
- What goes in a CIM for a Main-Street business: no federal rule we read prescribes one, but the lender checks the seller's figures against transcripts.
- Documents needed to sell a business without a broker: what the buyer's lender asks the seller for.
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.
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. The products: Pricing Analysis, CIM package and Acquisition Business Plan.
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
- SBA SOP 50 10 8.1, effective 1 October 2026: the Word file listed on SBA's SOP 50 10 page as 8.1 with Technical Updates, last updated 7 October 2026, retrieved 30 October 2026. Appendix 15 for the valuation, equity, coverage, amortization, Quality of Earnings and seller rules; Section A, Chapter 5 for verifying the seller's data; Section A, Chapter 2 for ESOPs.
Not verified, so not on this page: what a lender's valuation or Quality of Earnings report costs, or what brokers and document vendors charge; what counts as a close relationship; whether the $350,000 sentence reaches Standard 7(a) loans; any state's broker licensing rule; approval rates and closing times.
Frequently asked questions
Can a seller's own business valuation be used for the buyer's SBA loan?
No. Under Appendix 15 of SOP 50 10 8.1, the business valuation on an SBA 7(a) change of ownership other than an ESOP transaction must be requested by and prepared for the lender, which may not use one prepared for the applicant or the seller.
What happens if the price is higher than the SBA lender's valuation?
Appendix 15 of SOP 50 10 8.1 makes the difference equity and caps total debt, including seller debt not on full standby, at the valuation. In an Initial Acquisition with a $1,200,000 price, $1,100,000 valuation and $1,300,000 total project cost, equity is $200,000 (our cap reading), or $230,000 with the gap added to the 10 percent minimum. The SOP text we read does not say which; ask your lender.
Which of your documents is for the seller, and which for the buyer?
Business Plan Firm's Pricing Analysis ($1,250, 7 business days) and CIM package ($2,800, 10 business days) are for a seller; the Acquisition Business Plan ($1,800, or $2,800 with our acquisition model) is for a buyer's SBA 7(a) lender file. The lender's business valuation and any Quality of Earnings report are the lender's, not ours.
How long does each document take?
Business Plan Firm delivers the Pricing Analysis in 7 business days, the CIM package with blind teaser and data room index in 10 business days, and the Acquisition Business Plan in 7 business days on your own financial model or 10 with our acquisition model. Each fee is fixed before work starts.
Do you act as a broker or charge a fee tied to the sale price?
No. Business Plan Firm prepares documents on your instructions for fixed fees, payable whether or not any transaction completes and never calculated by reference to any amount raised, borrowed, paid or sold. We do not introduce buyers or sellers, solicit offers, negotiate, hold funds or bind any party.
This page summarizes Appendix 15 and Section A, Chapter 5 of SBA SOP 50 10 8.1 as retrieved on 30 October 2026. It is general information, not legal, lending, tax or valuation advice, and nothing we prepare is a lender's business valuation or Quality of Earnings report. Confirm your transaction's requirements with your lender, attorney and CPA before you sign.