SBA SOP 50 10 8.1: Buyers Can Now Order the QOE. Here's What the Credit Memo Misses.

Q: Who can order the QOE now?

SBA's September 25, 2026 technical update to SOP 50 10 8.1 lets a QOE prepared for the buyer count toward the requirement on change-of-ownership loans with a business purchase price of $3M or more, as long as it comes with a reliance letter to the lender or a secondary review by another firm. A QOE prepared by or for the seller still doesn't count.

Q: What does the credit memo miss that the QOE catches?

In a worked HVAC example, the seller's adjusted EBITDA of $1.5M becomes $1.2M after the QOE resets owner comp, removes unsupported add-backs, reconciles bank deposits to sales and reflects declining margins. DSCR moves from 1.54x to 1.23x against a 1.25x minimum, and value at 4.5x moves from $6.75M to $5.4M.

Q: How should lenders handle a buyer-ordered QOE?

Confirm it wasn't prepared by or for the seller, get a reliance letter addressed to the lender or order a secondary review, check the cash proof covers TTM plus the two most recent fiscal years, check every add-back has support, and tie the QOE-adjusted EBITDA to the DSCR in the credit memo and to the valuation.

Q: What does a QOE do beyond the credit decision?

It informs price, the working capital peg, deal structure such as a seller note or earnout, transition terms, purchase agreement protections and the servicing baseline.

Who can order the QOE now?

SBA's September 25, 2026 technical update to SOP 50 10 8.1 changed who can order the QOE. A QOE prepared for the buyer (the applicant) can now count toward the requirement on change-of-ownership loans with a business purchase price of $3M or more. It has to come with a reliance letter to the lender or a secondary review by another firm.

A QOE prepared by or for the seller still doesn't count. Earlier summaries written before the update say the lender must order it. That changed with the technical update (Coleman Report).

What does the credit memo miss that the QOE catches?

Consider a worked example of a 7(a) acquisition of an HVAC services business. The price is $6.75M at 4.5x, with a 10% equity injection. The credit memo sees $1.5M of EBITDA. The QOE finds $1.2M.

What the credit memo misses

The credit memo saw $1.5M. The QOE found $1.2M.

Seller's

adj. EBITDA

Owner comp

reset to market

Add-backs

no support

Bank deposits

short of sales

Margins

trending down

QOE

adj. EBITDA

SOP 50 10 8.1 area

Owner comp + discretionary expenses

Nonrecurring expenses + add-backs

Cash proof: TTM + 2 fiscal years

Revenue + margin trends

Value at the same 4.5x multiple moves from $6.75M to $5.4M.

Debt service coverage

1.25x minimum

QOE 1.23x

Credit memo 1.54x

1.00x1.70x

On the credit memo, DSCR is 1.54x. On the QOE, it's 1.23x, below the 1.25x minimum. At the same 4.5x multiple, $6.75M of value becomes $5.4M.

Finding	What the credit memo relied on	What the QOE tested	SOP 50 10 8.1 area	EBITDA impact
Owner comp reset to market	Seller's salary add-back as presented	Market cost of a replacement manager	Owner comp + discretionary expenses	−$110K
Add-backs no support	Add-backs listed in the seller's schedule	Invoices and ledger detail behind each add-back	Nonrecurring expenses + add-backs	−$60K
Bank deposits short of sales	Reported sales on the P&L	Bank deposits tied to reported sales	Cash proof: TTM + 2 fiscal years	−$80K
Margins trending down	A single year of earnings	Monthly revenue and margin trend	Revenue + margin trends	−$50K
$1.5M seller's adjusted EBITDA to QOE-adjusted EBITDA				$1.2M

How can lenders use the QOE to keep deals moving?

Engage the QOE process early, while price, financing and deal terms can still change. Testing earnings and add-backs before the credit memo is finalized gives the deal team time to resolve gaps rather than face late surprises.

The QOE isn't just a compliance checkbox. Alongside valuation, it's another arrow in the lender's quiver to negotiate from supported earnings and keep the acquisition on track.

How should lenders handle a buyer-ordered QOE?

Confirm it wasn't prepared by or for the seller.
Get the reliance letter addressed to the lender, or order a secondary review.
Check the cash proof covers TTM plus the two most recent fiscal years.
Check every add-back has support.
Tie the QOE-adjusted EBITDA to the DSCR in the credit memo and to the valuation.

What does a QOE do beyond the credit decision?

Price. Each adjustment times the multiple is a price gap.
Working capital peg.
Deal structure. Seller note, earnout.
Transition terms.
Purchase agreement protections.
Servicing baseline.