Resources
Acquisition math and process
Worked guides for business acquirers: DSCR, CADS, the SBA 7(a) rules from 1 October 2026, SDE vs EBITDA and valuation, with the numbers shown.
The math
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Quality of Earnings
Quality of Earnings add-backs: what lenders accept
Every business for sale arrives with an add-back schedule. The four categories an add-back falls into, the evidence a lender and a QoE analyst accept, the items both reject and why, and a worked example where a seller's adjusted EBITDA meets its first serious reader.
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Financing
SBA 7(a) DSCR requirements after 1 October 2026
From 1 October 2026 SOP 50 10 8.1 sets a coverage floor of 1.25:1 for an Initial Acquisition and 1.15:1 for a Business Expansion on historical results, bars projections, and on those two transaction types at a Business Purchase Price of $3 million or more makes the lender order a Quality of Earnings and use its earnings in the coverage test. The rules from the SOP text, a worked example, and the buyer's preparation list.
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Working capital
The working capital peg: how it moves the price after close
Every purchase agreement carries a working capital peg, and the price moves dollar for dollar against it after close. How the peg is set from the trailing twelve months, what the definition leaves out, the traps in the sign, and a worked example where the seller's closing statement meets the agreement's definition.
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Financing
DSCR for business acquisitions: the formula lenders use
Lenders do not divide EBITDA by debt service. The numerator they use, the 1.25× floor SOP 50 10 8.1 sets for acquisitions, and a worked SBA 7(a) example where the terms of a seller note decide whether the deal clears.
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Financing
What is CADS? Cash available for debt service, explained
The numerator in a lender's coverage ratio is not EBITDA. The four deductions that produce cash available for debt service, worked through on one business, and the working capital sign conventions that trip up most models.
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Valuation fundamentals
What a defensible DCF looks like
A DCF is easy to build and easy to pick apart. How to ground the growth rate, discount rate, and terminal value in the actual business, with a worked example checked two ways.
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Earnings basis
SDE vs EBITDA: which earnings number should a buyer use
The single most common valuation mistake starts with the earnings figure. When to use SDE, when to use EBITDA, the bridge between them, and a worked example that reconciles both to the same price.
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Valuation fundamentals
How to value a business
The complete buyer's guide to business valuation: the three approaches, earnings multiples, add-backs, which multiple applies to your deal, DCF, and how to turn a number into a range you can defend.
The market
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Independent sponsors
The independent sponsor's software stack in 2026
A sponsor runs a deal on a pipeline CRM, a data room, a spreadsheet model, a diligence tracker, a Quality of Earnings and a memo, bought from different vendors and tied together by hand. What each piece costs, with the date every price was observed, where the pieces fail to connect, and a worked example of a sponsor's year priced both ways.
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Quality of Earnings
What a Quality of Earnings buys, and who does the rest
A CPA Quality of Earnings engagement typically costs $25,000 to $75,000. What the fee buys, from the reconciliation to the cash proof to the report; who does the rest, the deal model, the lender's view and the narrative; when a buyer needs one regardless; and a worked example where two buyers hand the same firm two different schedules.
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Glossary
QoE, SDE, DSCR, CADS, NIS, NBS, peg, CCC, GRR, NRR and the rest, defined the way lenders and investors use them.
Put a number on it
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