Short answer: an independent, experienced financial professional engaged by the lender. SOP 50 10 8.1 states that the quality of earnings report “must not be prepared by or for the seller” and must be conducted for the benefit of the lender. That rules out a seller-commissioned report outright. As of the technical updates effective October 1, 2026 it no longer rules out a buyer-commissioned one — the word “borrower” was struck from the clause. What a lender cannot do is rely on another party’s report without having one of its own approved vendors review it first, with the review findings retained in the loan file alongside the original report. Software can do the work. Software cannot be the provider.
Updated October 1, 2026. SBA’s September 25 technical update narrowed the quality of earnings independence clause. Read what changed and what it means for a lender’s file.
For the requirement itself, see SBA quality of earnings.
What the SOP actually says
Most of what has been written about the October 1, 2026 rules paraphrases other summaries. Here is the operative language, quoted from Appendix 15 of SOP 50 10 8.1:
The QoE must be performed by an independent, experienced financial professional and must be conducted for the benefit of the Lender. As the QoE is part of the financial due diligence of the transaction, the report must not be prepared by or for the seller.
The definition in Appendix 3 adds that a quality of earnings analysis is “an independent financial due diligence report” and that it “must include a Cash Proof” — a reconciliation of bank statement data to the income statement and the tax return for each period under review.
The business valuation requirement carries the same rule in almost the same words: “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.” Unlike the quality of earnings requirement, that one has no dollar threshold at all.
Four arrangements, and which ones qualify
| Arrangement | Does it satisfy SOP 50 10 8.1? |
|---|---|
| The buyer runs a self-service quality of earnings or proof-of-cash tool on their own deal and gives the output to the lender. | Not on its own. The bar on borrower-prepared reports was removed effective October 1, 2026, so a buyer-commissioned report is now eligible. The lender still may not rely on it without a review by one of the lender’s own vendors, and the SOP still requires an independent, experienced financial professional — which a tool the buyer runs itself does not supply. |
| The seller or the broker commissions a sell-side quality of earnings and the buyer’s lender relies on it. | No. Prepared for the seller, which the SOP bars outright and states more firmly after the October 2026 update. Useful for readiness; it is not the report the loan file needs. |
| The lender engages an independent firm, which performs the analysis and signs the report. | Yes. This is the arrangement the SOP describes. The lender then uses the report’s earnings figure in debt service coverage and retains it in the credit file. |
| The buyer commissions a report from an independent firm, and the lender has one of its own vendors review it. | Yes. This is the arrangement the October 2026 technical updates expressly contemplate, to avoid paying for the work twice. The review findings must be retained in the loan file with the original report. |
The distinction is not about whether artificial intelligence was used. It is about who commissioned the work and who is accountable for the conclusions. A lender can accept a report built with heavy automation. A lender cannot accept a report with no independent professional behind it, however it was produced.
Where software fits, honestly
Every firm doing this work at volume uses tooling. Document intelligence platforms read data rooms. Tie-out tools like DataSnipper sit inside audit workflows. Spreading tools structure filings. None of those products is a quality of earnings provider, and none of their vendors claims to be — they are inputs to a professional’s work.
The same logic applies to us, with one difference: we are both. QoEAgent builds the technology and takes the engagement. That is worth stating plainly, because the two are easy to confuse.
What QoEAgent is
QoEAgent is an independent financial due diligence firm. We are engaged directly by the lender, we perform the analysis, and a credentialed professional signs the report. Josh Cashman holds the CFA and the ASA. Ron Neufeld holds the CPA and the ABV. Both the ASA and the ABV appear on the SOP’s Qualified Source list for business valuations, alongside the CBA, CVA and BCA.
Our own technology does the work that used to take weeks: parsing scanned bank statements, rebuilding cash receipts and disbursements transaction by transaction, mapping the trial balance, and producing GAAP-formatted statements. On a recent trailing-twelve-month engagement that meant 431 scanned bank statements across 36 bank accounts and 29,823 general ledger transactions, reconciled at a 99.4% average match rate, with a single $32 variance left flagged for a person to resolve. Proof of cash came back in 24 hours and GAAP-formatted financials in 48. Our SBA engagements go on from there to the full quality of earnings, QoE Essentials: normalized EBITDA with documented add-backs, working capital, customer concentration and a change-of-control review of key contracts. But the automation is how the work gets done, not who is responsible for it. A person reviews the exceptions, forms the conclusions and signs.
We also work behind certified public accounting firms and transaction advisory practices that want the cash reconstruction done faster than they can do it in-house. In that arrangement the firm is the independent provider and signs the report; we are their capacity. Both models satisfy the SOP, because in both the engagement runs to the lender. What does not satisfy it is a borrower running any tool, ours included, on their own deal and calling the output a quality of earnings report.
What to ask a provider before you engage them
- Who is your client on this engagement, and who signs the report?
- What credential does the signer hold?
- Does the cash proof cover the trailing twelve months and the last two fiscal years, as the SOP requires?
- Does it reconcile bank statement data to both the income statement and the tax return?
- Will the report state an earnings figure the lender can carry directly into debt service coverage?
- If the seller’s records are scanned paper rather than clean exports, does that change your scope or your price?
Related reading
- SOP 50 10 8.1: what changes for business acquisitions
- The SBA quality of earnings requirement
- What an SBA cash proof has to contain
- SBA lender checklist for October 2026
- AI due diligence tools: the four categories
Sources
- U.S. Small Business Administration, SOP 50 10 8.1, effective October 1, 2026. Quality of earnings and business valuation requirements appear in Appendix 15 under Credit Standards, Financial Due Diligence; definitions appear in Appendix 3. Every quotation on this page is taken from that document.