Short answer: Starting October 1, 2026, SBA SOP 50 10 8.1 requires a quality of earnings (QoE) report on 7(a) business acquisitions with a purchase price of $3 million or more. Most SBA lenders have never had to source this work, so they will soon be looking for providers, and lower middle market QoE firms should expect the calls.
The requirement these questions all come back to is the SBA quality of earnings rule.
What the Mandate Actually Changes
For a long time, SBA lenders did acquisition due diligence on the seller’s financials and a CPA-prepared compilation or review, plus whatever else the bank’s credit policy asked for. Quality of earnings belonged to larger deals, the ones with advisors, data rooms and private equity on both sides.
SOP 50 10 8.1 changes that for the upper end of the SBA acquisition market. For Initial Acquisition and Business Expansion transactions where the purchase price is $3 million or more, the lender must obtain a QoE in addition to the business valuation. The threshold is measured before buyer equity, seller debt or other financing, so a $3.2 million purchase is in scope even when the 7(a) loan itself is smaller. A $2 million purchase of a hardware store is not. Owner Buyout and ESOP & Cooperative transactions are exempt. The rule sits in Appendix 15 of the SBA’s SOP 50 10 8.1, and our SOP 50 10 8.1 guide walks through it.
Who Has to Source This Work
The SOP is specific about who can do it. The QoE “must be performed by an independent, experienced financial professional and must be conducted for the benefit of the Lender,” and it “may not be prepared by or for the borrower or seller.” A buyer cannot run their own QoE and hand it to the bank, and a lender cannot reuse a report the seller commissioned. Who can prepare an SBA quality of earnings covers what that means in practice.
For most community banks and SBA-focused lenders this is new territory. Their credit officers are used to reviewing compilations and tax returns, not scoping QoE engagements, and the lender must now use the QoE’s earnings figure in its debt service coverage calculation. Firms that already do AI-assisted quality of earnings on lower middle market deals are a natural fit: they know the deal sizes, the data that is usually available, and how to deliver on a loan closing timeline.
What This Means Right Now
We built QoEAgent to handle this kind of volume. The SOP requires every SBA QoE to include a Cash Proof covering both the trailing twelve months and the last two fiscal years, and our proof of cash for SBA lenders is built around that requirement. We have updated our data request workbooks and procedures for the SBA lender context and built a client portal to run this work at scale ahead of the October 1 effective date. Lenders preparing for the change can start with our October 2026 SBA lender checklist.