Credex Advisors prepares the independent quality of earnings report with cash proof that SBA 7(a) lenders must obtain under SOP 50 10 8.1 for Initial Acquisition and Business Expansion loans with a purchase price of $3,000,000 or more. Lender engaged, CPA prepared, fixed fee from $12,500, delivered in ten business days from complete seller documents, and written to hold up in credit committee, SBA loan review, and a guaranty purchase.
It applies to loans that receive an SBA loan number on or after October 1, 2026, under SOP 50 10 8.1. The trigger is an Initial Acquisition or Business Expansion change of ownership with a business purchase price of $3,000,000 or more. Owner buyouts and ESOP or cooperative transactions are exempt.
An independent, experienced financial professional engaged by the lender and working for the benefit of the lender. The borrower, the seller, and the broker cannot supply it, and a report they commissioned does not satisfy the SOP. Credex Advisors is a licensed CPA firm engaged directly by the lender.
No. The SOP requires both. The valuation supports the purchase price; the QoE tests whether the earnings behind that price are real and sustainable, and the lender must use the QoE earnings in the debt service coverage calculation.
A cash proof reconciles the revenue and expenses on the financial statements and tax returns to the cash that actually moved through the bank accounts. It is the one procedure that catches unreported deposits, personal spending in the ledger, and earnings that exist on paper only.
Under PLP authority, a vendor must be retained and an engagement letter must be in place when the SBA loan number is issued; the report itself can follow. Credex countersigns within one business day of a request, so the file is never held up on this.
Ten business days from complete seller documents, five expedited. The engagement letter ties the delivery date to document delivery, Credex requests documents from the seller and the seller's accountant directly, and you are copied on every status note. A slow seller extends the seller's clock, not yours.
Appendix 15 names four categories: non recurring items, owner compensation restated to market, related party transactions restated to arm's length, and deferred maintenance and capital expenditures, plus a conversion from cash basis to accrual basis where the seller's books are kept on a cash basis. A Credex report presents each adjustment on its own line with its support, so the lender can see the management adjusted number and the diligence supported number side by side.
No. An audit opines that the statements are fairly stated for a fiscal year. It does not test whether the earnings recur, does not produce an adjusted earnings figure, and is not engaged by the lender. The QoE is a separate diligence report and is required even when the target has audited statements.
The lender engages Credex, but under Appendix 15 the cost of financial due diligence may be passed to the borrower, financed with loan proceeds, and counted toward the equity injection. Most lenders pass it through.
It is written for exactly that. Every procedure is documented, every adjustment is supported, the databook is retained, and the report is addressed to the lender with SBA reliance stated.
One review of the standard statement of work and engagement letter with credit and legal. After that, every deal uses the same paper: send the deal terms, we countersign within one business day and issue the seller request the same day.