Methodology: deal
Deal and Listing Financeability Methodology for SBA Acquisitions
Policy update: SBA SOP 50 10 8.1 took effect October 1, 2026. This guidance was reviewed before that change and is due for review. Confirm current transaction requirements with your lender and the official SBA SOP.
Deal financeability asks whether the target's supportable historical cash flow and transaction facts can carry the proposed capital stack. A profitable company can still be unfinanceable at the asking price, with the proposed working capital, or for the proposed buyer.
Transparent methodologyPolicy as of 2026-08-15Preliminary, not a loan approval
Deal inputs
Deal inputs
- Three years of business tax returns where available.
- Current interim profit-and-loss statement and balance sheet.
- Reconciliation of reported earnings, SDE or EBITDA, and defensible add-backs.
- Purchase price, allocation, working capital, closing costs, and total project cost.
- Debt schedule, leases, contingent liabilities, and required capital expenditures.
- Seller-note amount, equity treatment, standby, subordination, and payment terms.
- Customer concentration, recurring revenue, industry, occupancy, and transition risks.
Cash-flow model
Cash-flow model
Modeled DSCR equals eligible annual cash flow divided by total annual debt service included by the lender. Emporio displays the rate, term, loan amount, seller-debt treatment, and planning DSCR used. A 1.25x planning assumption is a screen, not a universal SBA approval threshold.
Listing-level conclusion
Listing-level conclusion
A listing can be described as likely financeable only at a stated price range and assumptions. It must never be marketed as SBA approved. Buyer approval remains separate.
Authored and reviewed by Emporio Partners
Historical policy basis: SBA SOP 50 10 version 8, effective 2025-06-01. Version 8.1 took effect 2026-10-01; this guidance has not yet been substantively reviewed against that update.
Primary policy source
Educational planning guidance only. Emporio Partners is not a lender and does not issue approvals, pre-approvals, commitments, or guarantees. Lenders determine eligibility, eligible cash flow, structure, terms, and approval.
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