In order to answer the question “How long does an SBA Quality of Earnings report take?” first understand that there is no one-size-fits-all deadline. An SBA Quality of Earnings timeline takes depends on several factors. These may include the review’s scope, record quality, and number of accounts. Seller responsiveness can also speed up the process or cause delays. In many cases, a QoE report is ready within a few weeks. However, thorough testing and reliable findings matter more than meeting an arbitrary deadline.
Additionally, SOP 50 10 8.1, effective October 1, 2026, requires Cash Proof for the trailing twelve months and prior two fiscal years. Cash Proof involves reviewing bank deposits to help verify reported revenue and identify non-revenue deposits. Because this review requires complete bank records and time to investigate differences, missing information can delay the report. Therefore, lenders should identify the need for a QoE early, giving everyone more time to gather records and resolve potential issues before closing.
Peak Business Valuation provides lender-directed Quality of Earnings services nationwide. Peak can also coordinate separate business valuation or equipment appraisal engagements. If you are seeking an SBA-compliant QoE analysis, contact Peak! Press the button below to schedule your free consultation.
How Long Does an SBA Quality of Earnings Report Take?
Many factors can affect the timeline of an SBA QoE report, such as the financial and operational records provided. For example, complete, up-to-date financial records can help speed up the review. Meanwhile, missing information can lead to more questions and extra work. That being said, most SBA Quality of Earnings reports are completed within a few weeks.
The number of entities and bank accounts involved also affects the timeline. A single-entity company may have only a few bank accounts. Larger companies often have several entities and merchant accounts. Related-party transactions may also require extra scrutiny, such as sales between family members or loans to connected businesses. Each of these variables requires different levels of analysis, affecting the overall SBA Quality of Earnings timeline.
What Happens During the SBA Quality of Earnings Engagement?
An SBA QoE analysis follows several steps from start to finish. The exact process can vary based on the engagement and records provided. Below, we provide a standard process for completing an SBA Quality of Earnings report.
- Gather information. The lender and provider confirm the transaction details and covered periods. The provider then gathers the records needed for the engagement. These may include financial statements, tax returns, IRS transcripts, general ledgers, and bank records.
- Reconcile financial records. Next, the QoE analyst compares financial statements with supporting records. This process helps identify differences that require further review or explanation.
- Perform Cash Proof and test adjustments. The QoE analyst performs a Cash Proof for the required periods. They also test add-backs, owner compensation, and related-party transactions.
- Analyze revenue and earnings. Fourth, the provider reviews revenue and other factors affecting earnings. Common factors include customer concentration, margins, and revenue sustainability.
- Prepare the report. Last, the analyst determines the earnings supported by the available evidence. The QoE provider then prepares the report and addresses remaining questions.
This process helps the lender understand the business’s supported earnings. Complete records and quick responses can help keep the review moving forward.
Which Documents Delay How Long an SBA Quality of Earnings Report Takes?
Missing bank statements or incomplete account records can create significant delays during Cash Proof. Analysts rely on complete records for the required periods, so gaps slow down the process. Similarly, mismatched customer reports or missing payroll details can cause issues.
Unsupported add-backs or unverified transactions also require extra time to resolve. However, providing documentation early reduces unnecessary follow-up and keeps the process moving smoothly. Clear, organized records help avoid delays and ensure a faster review.
How Can a Seller Make Cash Proof More Efficient?
To help Cash Proof run smoothly, sellers should provide a complete list of bank and merchant accounts. In this list, include all the statements for the required periods. Sellers should also identify non-revenue deposits, such as transfers, loan proceeds, and owner contributions. However, sellers do not simply remove these items. Each material reconciling item needs supporting evidence that the QoE analyst must review.
As a trusted SBA Quality of Earnings provider, Peak Business Valuation has the training and expertise to deliver a detailed SBA QoE report. If you have any questions about SBA QoE reports, connect with Peak. Schedule a free consultation today to get started!
When Should the Lender Order the QoE?
Ideally, the sooner the lender can order the QoE report, the better. Lenders should decide early in underwriting if a QoE is needed. This is because waiting until closing creates unnecessary pressure and delays. Starting early allows for more time to gather missing information.
When ordering an SBA Quality of Earnings analysis, the lender should also consider the transaction structure and purchase price. These details help determine the right scope and timing for the QoE. In some cases, a lender requires a QoE report and a business valuation. While the QoE and business valuation can proceed in parallel, they remain separate processes. Ordering early allows more time to review earnings and adjust underwriting if needed.
Can an SBA Quality of Earnings Timeline Be Rushed?
In some cases, a provider may be able to prioritize an engagement, but a tight deadline does not reduce the required scope. A complete Cash Proof analysis still needs full periods and supporting records. Additionally, material add-backs and revenue sustainability still require proper analysis. In other words, missing records cannot be ignored just to meet a deadline.
Rush requests work best when the data package is already complete. They become harder if accounts are still being identified or records need rebuilding. As such, prepare ahead of time to prevent short deadlines. Determining the timeline and breadth of an engagement early helps lenders and SBA QoE providers meet their deadlines.
How Does the SBA Quality of Earnings Timeline Affect Underwriting?
The timing of an SBA Quality of Earnings report can impact underwriting significantly. Lenders use the final, supported earnings from the QoE to make their decisions. If those supported earnings differ from what was initially projected, the lender may need to adjust the loan terms. For example, if the QoE reflects lower earnings, it could affect the buyer’s ability to cover loan payments. This disparity might require changes to the loan structure, such as a smaller loan amount or additional equity from the buyer. If these adjustments are not made early, they can create major issues close to closing. As a result, it is in the best interest of all involved to order the QoE analysis early. Preparation allows time to address any issues and keeps the SBA Quality of Earnings timeline on track.
How Can Buyers, Sellers, and Lenders Prepare?
To prepare for an SBA QoE report, lenders should confirm the transaction, scope, and required report early. They should also communicate their expectations to the provider. These first steps ensure transparency and understanding from the start.
Sellers can prepare for a QoE analysis by organizing complete records by entity and period. They should also prepare supporting documentation for proposed adjustments. Prompt responses to questions from the provider or lender can further reduce unnecessary delays.
For buyers, note that the lender ultimately controls the required QoE engagement. A buyer may already have completed separate due diligence. However, that work does not replace the lender-directed QoE when required.
Conclusion
Many factors influence the response to “How long does an SBA Quality of Earnings report take?”. In most cases, an SBA Quality of Earnings timeline takes a few weeks to complete, but the timeline ultimately depends on the complexity of the business and engagement. Complete records, clear scope, and prompt responses can help prevent delays. However, the provider must still complete the required procedures and testing. Lenders should therefore order the QoE early when the requirement applies. Doing so gives sellers, lenders, and providers sufficient time to resolve support issues. It can also help prevent unexpected underwriting changes near closing.
Peak Business Valuation provides independent, lender-directed Quality of Earnings services nationwide. Contact Peak to discuss your SBA QoE timeline, scope, and Cash Proof requirements. Schedule your free consultation with Peak Business Valuation today!
