Updated Valuation Guidance for 7(a) and 504 Loans (Effective June 1, 2025) SOP 50 10 8 provides specific thresholds and scenarios dictating what type of valuation is required and by whom for 7(a) and 504 loans. Valuation professionals including CVAs, CPAs, and other appraisers should understand these guidelines to ensure their appraisals meet SBA standards. All requirements cited here are drawn directly from this SOP. Effective June 1, 2025, the U.S. Small Business Administration’s (SBA) SOP 50 10 8 (Lender and Development Company Loan Programs), brought important updates and clarifications to business valuation requirements for 7(a) and 504 loan programs.…
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Key Personnel Dependence in Sell-Side Business Valuation This article examines one of the primary issues that CVAs encounter when advising clients who are preparing to sell. By identifying challenges early in the valuation process, CVAs can better educate sellers on weak points in their business and prepare them for potential poor reception that they may face from prospective buyers. Introduction Business owners preparing to sell often underestimate the risks that prospective buyers perceive in their companies. This misalignment stems from two primary factors: an owner’s intimate familiarity with firm operations and the buyer’s lack of direct involvement or institutional knowledge.…
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How Business Valuations Drive Smarter Lending Decisions This article provides a case study that highlights the methodology behind SBA-compliant business valuations. The article underscores the importance of grounding the analysis in standard valuation techniques, using reliable industry benchmarks, and properly documenting adjustments. The role and value of business appraisers to the lender and parties involved in a potential SBA-financed transaction is also discussed. Business valuations play a vital role in SBA financing. For both 7(a) and 504 loan programs, an independent business valuation is typically required in the following situations: The total financing amount (including SBA loans, seller financing, or…
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To Create a Visual Picture Every profession has its own unique vocabulary, and although everyone in the field understands the terms or abbreviations, the public most likely does not. An easy way to help people understand technical terms or a profession’s distinctive vocabulary is to create a “word picture” that links that unique word to some everyday idea or object. The author suggests that metaphors and similes are keys to enabling the client to make these connections. Every profession has its own unique vocabulary, and although everyone in the field understands the terms or abbreviations, the public most likely does…
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for SBA Lending Programs Despite the pandemic, the number of small businesses started continues to increase. This article discusses the various Small Business Administration (SBA) programs and the value of serving these lenders. “Success is a full-time job.” Grant Cardone Any entrepreneur or a small business owner would agree that running a successful small business is a full-time job. To run it well requires an enormous commitment of time and dedication. Over the last few years, the number of small businesses in the United States has continued to climb up. In fact, according to the U.S. Small Business Administration (SBA),…
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Non-Litigation #2 and Litigation #4 The NACVA’s Standards Board was formed to continually review the organizations’ standards and to ensure that the NACVA’s Professional Standards remain up to date, relevant, and relatively consistent with the standards of the other professional organizations. This article addresses the second Non-Litigation and the fourth Litigation FAQ Interpretations published by the NACVA. [su_pullquote align=”right”]Resources: NACVA Professional Standards Standards FAQ Library [/su_pullquote] Business valuation/appraisal standards are promulgated by different business appraisal organizations. The NACVA’s Standards Board was formed to continually review the organizations’ standards and to ensure that the NACVA’s Professional Standards remain up to date,…
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and Expert Witnessing In this article, the Expert Witness Exchange (EWE) discusses expert witness opportunities available to CVAs. [su_pullquote align=”right”]Resources: Certified Valuation Analyst® (CVA®) Credential Online Directory: Find a CVA Expert Witness Bootcamp [/su_pullquote] As a Certified Valuation Analyst (CVA), there is a vast array of employment opportunities you can pursue. One area that may not be as obvious is the ability to play a crucial role in our legal system. The knowledge and expertise CVAs have to offer is incredibly important and frequently sought after by attorneys across the country. However, most attorneys are not looking for any random…
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Now How Do I Obtain Work? Earning a professional accreditation, such as the CVA is an accomplishment. Getting engagements thereafter is another matter. In this article, the author shares what he thinks newly minted CVAs may want to consider to develop their practice niche and brand.
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Case Law Update February 2018 In this case law update, we review one U.S. Tax Court case that provides guidance regarding when is a bad debt business loss deductible and whether contributions of money to a business is equity or debt. In addition, we present several Delaware Court cases; one of them, a post-dissolution case where one NACVA member (and another inactive member) testified and the court addressed the S corporation tax affecting and availability of discounts for lack of marketability. The issues raised there are frequently raised in other dissolution actions and the reasoning provided by the court regarding…
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Opportunities for Valuation Pros The widespread destruction left in the path of Hurricanes Harvey, Irma, and Maria provides ample ground and opportunities for CVA professionals to assist the public. In this article, the author, a CVA, details those opportunities.
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Negotiating, Structuring, and Reaping the Reward The authors share their views on what business owners should consider doing in anticipation of selling their business. The authors also share structuring considerations to close the transaction and reap the reward.
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NACVA’s Silver Anniversary Conference NACVA and the CTI’s 2016 Annual Consultants’ Conference held this past June in San Diego, CA was a spectacular assembly of presenters, attendees, exhibitors, candidates, and staff. This one pulled out all the stops, featuring prestigious keynote speakers, engaging training sessions, an assortment of networking opportunities, and many more events to enjoy. It proved to be a truly remarkable Silver Anniversary celebration.
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Agreements that work for both death and lifetime transfers Buy/sell agreements are absolutely critical to succession planning, but are too often neglected. Even when they are set up, they are generally structured to be funded by life insurance proceeds, in the event of death, rather than company cash flow. John H. Brown explains why this can be a big mistake and how certified valuation analysts (CVAs) are in a unique position to help business owners successfully avoid common pitfalls by planning for all possible scenarios.
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Increased Transparency, More Automation, and More Access to Capital Rod Ebrahimi, a columnist for the Entrepreneurs section of Forbes, writes that “Thousands of miles away from Wall Street, some David-sized companies in Silicon Valley are cultivating new trends that will change people’s relationship with money.”
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Few Business Owners Seem to Even Know How to Make a Good Guess at What Their Business is Worth. NY Times Introduces Technology to Help—and Certified Advisers Provide Extra Value. Mark Cohen, at The New York Times Small Business Guide, reports: “At 53, Joe Ritz is old enough to remember a time when many of the classic cars that now pull into his specialized repair shop were new. “It’s one field where it pays to be a senior citizen,” he said. It’s Critical for a Business Owner to Know the Value of His Business; Here are Tips on Technology, Advisors,…
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Aswath Damodaran, NYU’s Legendary Valuation Expert, Recently Argues that there’s a 90% Chance Apple is Undervalued. Here’s Why. This comes in the wake of Apple shares’ breathtaking plunge from recent highs. (That’s be about $700 in September to $425 or so today.) In a new blog post, Sam Ro at Business Insider reports that Damodaran thinks that management can learn a few things from the recent market volatility, and he offers some advice. Here are his four tips verbatim (emphasis courtesy of Business Insider’s Sam Ro: Build up credibility with investors: The company has to regain credibility with investors. Apple…
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Tighter Regulations Leave Less Room for Error When Computing and Disclosing How Much Mortgages Cost. John Adams at American Banker reports that Ernst Publishing, not related to the accounting company, sells technology and closing cost data to mortgage market players. Its clients include nine of the largest ten originators and servicers and the largest five title insurance companies. And it has now received a U.S. patent for its recording fee and tax calculator, called “System and Method for Generating and Tracking Field Values of Mortgage Forms.” Read the whole thing here. More:
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Sweet Tax Deductions for Individuals That Often Get Forgotten With October 15 behind us and April 15 still comfortably far away, it’s a good time to start boning up on ways to save your clients money once things start getting serious. With that in mind, Bankrate.com identified 10 great deductions that individual taxpayers should use – but often forget. Accounting Today passes on the good news. Here’s the list:
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Rule Will Require a Second Appraisal in Situations Where a Home is Being Flipped for a Quick, Higher Resale A new rule passed Jan. 15 gives mortgage lenders an additional year to institute appraisal standards for higher-risk loans, Bloomberg reported, and Appraiser News Online highlighted. The extension is one of the revisions that regulators made to the Dodd-Frank Act to address concerns from financial firms. Appraiser News Online explains that:
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Ahead of the new health-care law, small firms worry about crossing the crucial 50-person threshold — and about rising premium rates Emily Maltby at the WSJ Law blog reports on increasing concerns about the forthcoming healthcare laws among small business owners. This seems to be a prominent issue and concern among small business owners, and has been noted in most every major media outlet in recent weeks, from the New York Times to Forbes, CNN, US News & World Report, FoxNews, The Economist, The Hill, the Washington Post, and more: