Who pays for the SBA-required quality of earnings, and what does it cost on a $3M+ deal?

Who orders the report, and who pays?

The lender commissions the QoE. It must be independent and prepared for the lender's benefit, so a report ordered by the buyer, the seller or a broker does not satisfy the rule, per CLA. Weaver also notes the report must be conducted for the lender's benefit. FunderIntel adds that the buyer may not control the provider or the scope.

Several firms' write-ups do not say who pays, including CBIZ, CLA and Weaver. Two that do:

• EisnerAmper says the borrower can pay directly, the cost can be financed with loan proceeds, or it can count toward the required equity injection.
• Accredited reports the cost is passed to the borrower and that spending on the QoE and valuation counts toward the injection.

These are secondary reports. Ask your lender in writing whether the fee is due up front, whether it can be financed and whether it counts toward your 10%. See Can a seller note count toward the SBA 10% down payment?.

The rule does not set who bears the cost between buyer and seller. Whether a seller shares it is a term to negotiate and put in the LOI. I did not find a source that says a seller must pay.

What does it cost?

Published figures are few, and they come from small samples. The ones I found:

• A Searchfunder lender post: proposals ranging from about $7,500 to $30,000 or more.
• Beancount: full engagements commonly about $10,000 to $35,000, with a median near $12,000, and smaller reviews for less.
• Big Deal Small Business survey: 16 respondents, a median purchase price of $4.05 million, and 11 who used a QoE advisor. The median QoE cost was $40,000, most full reports ran about $20,000 to $50,000 and a few lighter ones cost under $10,000. The author calls it an open-ended survey, not a scientific poll.

These do not agree, and none is a rate card. Treat them as a range of about $7,500 to $50,000 and expect the quote to depend on the books.

What does that mean on a $3.5 million deal?

Assume a $3,500,000 price. The fee as a share of price is:

1. $7,500 / $3,500,000 = about 0.2%.
2. $12,000 / $3,500,000 = about 0.3%.
3. $40,000 / $3,500,000 = about 1.1%.
4. $50,000 / $3,500,000 = about 1.4%.

Compare that with what the report can change. The lender uses QoE earnings in the 1.25x test. At 10% over 10 years, each $100,000 of annual cash flow supports about $504,000 of loan at 1.25x, per the math in How much will a bank lend to buy a business?. If the report removes $100,000 of add-backs, the loan can fall by about $504,000. The fee is small next to that, but it is cash you spend before closing.

What drives the price?

• Scope. A cash proof tying receipts and disbursements to bank statements for the trailing 12 months and the last two fiscal years is required, per CLA and EisnerAmper.
• Bookkeeping. Cash-basis books, missing reconciliations and many add-backs take more hours.
• Complexity. Customer concentration, related-party deals and inventory add work.
• Full or lighter scope. CLA says it is unclear whether a $3 million deal will require a full engagement or accept a lighter one focused on coverage.

When does the work happen?

Accredited reports the work takes at least three to four weeks. EisnerAmper reports that under the Preferred Lender Program the valuation and QoE can finish after the SBA loan number is issued, if the vendor is engaged by then. Start the work after the cheap deal-killers are cleared, as in Do you need a quality of earnings report to buy a small business?.

Can I avoid the QoE?

Only by falling below the line. The $3 million is measured before buyer equity and seller notes, per CLA, so a seller note does not reduce it. Owner-occupied real estate is excluded. Owner Buyouts and ESOP or cooperative transactions are exempt.

Where these numbers come from: The rule and its scope are from SBA SOP 50 10 8.1, which applies to loans numbered on or after October 1, 2026 (SBA Information Notice 5000-880695), as summarized by the publishers linked above. Cost figures are from Searchfunder, Beancount and Big Deal Small Business, with the survey caveats stated. Confirm current terms and fees with an SBA lender.

Related questions

Can I use the seller's QoE instead?

No. The report must be independent and prepared for the lender's benefit, so a sell-side report does not satisfy the SBA rule. It can still help you decide whether to make an offer.

Does the $3 million include working capital or real estate?

It is based on the business purchase price. Owner-occupied commercial real estate is excluded, per CLA.

Is a QoE the same as an audit?

No. It tests whether earnings are repeatable and supported. It does not give an audit opinion on the financial statements.

What comes next

Before you pay for a QoE, find out whether the deal clears coverage on the numbers you already have: My deal cleared 1.15x DSCR. What happens now that the SBA requires 1.25x? Buyers who plan more than one acquisition keep these reports and the monthly financials they test, because the next lender or investor will ask for them.

Related articles

• Do you need a quality of earnings report to buy a small business?
• Should I get SBA pre-qualified before I sign an LOI?
• What do lawyers and accountants cost when you buy a business?
• How do you verify that a seller's numbers are real?
• What are the SBA 7(a) rules for buying a business in 2026 (SOP 50 10 8.1)?

Meraki Dealmakers is a service of Meraki Partners, LLC, an advisory firm. It is not a broker-dealer, investment adviser, business broker, law firm or accounting firm. This article is general information, not legal, tax or investment advice.