Business Valuations for SBA Lending
Affirmed Valuation Services’ primary focus is providing certified business valuations (appraisals) for SBA lending purposes and its goal is to provide quality business valuation reports on a timely basis to its clients.
Professional Designation - SBA Requirement
Chuck Miller, founder, has performed hundreds of business valuations for SBA financing purposes over the past several years, is well versed in the needs of SBA lending clients and the valuation attributes of small businesses, and holds the Certified Business Appraiser professional designation which meets the SBA SOP 50 10 5(K) requirement for a "qualified source".
Typical Documents & Process
Click on this link for a typical Document Request list for an SBA lending business appraisal.
Click on this link for the typical Valuation Process Steps for a business appraisal.
SBA Tailored Report
The typical SBA business valuation report provided is known as a Summary Report with a Conclusion of Value that complies with the standards of the SBA, the Institute of Business Appraisers, USPAP (Uniform Standards of Professional Appraisal Practice) and is usually about 35 to 50 pages in length (excluding any additional addendum exhibits that are sometimes attached). This type of report is consistent with the SBA SOP requirement for a Business Appraisal unlike the "Calculation" type reports provided by many business valuation providers (see the blog post post here for more info on appraisal vs. calculation engagements).
Unlike many other small business appraisers, all three approaches to value are considered in every report including the:
- Income Approach (Income Capitalization or Discounted Cash Flow methods),
- Market Approach (the Private Transaction method and Rule of Thumb method if applicable), and
- Asset Approach (an Adjusted Book Value method or Excess Earnings method is presented in every report if applicable).
Turnaround and Fees
Goal turnaround time goal is 10 business days or less after the receipt of the basic assignment information.
The appraisal fees for SBA business valuation summary reports typically range from $2,000s to the $3,000s depending on the complexity and/or size of the business. A site visit may be included in the base appraisal fee if the assignment is for a local business in the regional Minnesota market. Otherwise, a desk appraisal is typically performed and management interviews will be conducted via telephone unless other travel arrangements are made with the client. Additional fees may occasionally be required on a job specific basis for items such as larger middle-market size businesses, various non-standard accounting situations (such as consolidating or separating different business entities or divisions), certain site visit time, or various other non-standard work.