Buyers can now commission their own QoE on SBA Deals: What the September guidance changed

What the September guidance changed (Just In)

As originally published, the QoE had to be performed by an independent financial professional for the lender's benefit. A report commissioned by the buyer or the seller did not satisfy the requirement. We walked through the original requirement in Just In: New SBA 7(a) Quality of Earnings Rules Are Here.

You have commissioned your own Quality of Earnings report, and your SBA lender has just told you it might not count. Or you are about to commission one and want to know whether to wait for the lender to pick the provider. Both situations are common right now, and the headline version of the story makes it sound simpler than it is.

The baseline rule

The starting point is SOP 50 10 8.1. SBA 7(a) lenders must obtain an independent QoE report for Initial Acquisition and Business Expansion transactions with a Business Purchase Price of $3 million or more, excluding appraised owner-occupied real estate. It applies to loans receiving an SBA loan number on or after October 1, 2026.

As originally published, the QoE had to be performed by an independent financial professional for the lender's benefit. A report commissioned by the buyer or the seller did not satisfy the requirement. We walked through the original requirement in Just In: New SBA 7(a) Quality of Earnings Rules Are Here.

What the September guidance changed

The September guidance loosened the rule in one specific way. It confirmed that the required scope of the QoE analysis remains unchanged. It also gave buyers who have already commissioned a QoE a practical alternative: a lender may rely on a buyer-procured QoE if one of the lender's approved third-party providers reviews it before it enters underwriting.

So the buyer can pay for the report, but the lender still needs one of its own approved providers in the loop. The scope of the work stays the same, so a lighter report does not become acceptable just because the buyer ordered it.

Where the mechanics are still unsettled

This is the part to watch. One review of the September 25 technical-update notice found that the notice permits an applicant-commissioned QoE with a reliance letter or a secondary review by a different firm. The current SOP text requires review by a lender-approved vendor before reliance. That review advises against assuming a reliance letter alone is enough.

Two documents say two different things. Lenders will likely default to the stricter reading until SBA reconciles them, so plan for the stricter one:

• Ask your lender which providers are on its approved list before you engage anyone.
• If you already have a buyer-commissioned report, ask the lender who would review it, and whether a reliance letter would be accepted at all.
• Get the lender's answer in writing, and keep it in the deal file.

What it means for buyers and providers

For buyers

The economics are unchanged. Lenders size the loan against the earnings the QoE supports. If those earnings do not cover annual debt payments, the loan shrinks, and the gap has to be closed with more buyer equity, a lower price, or seller financing.

The threshold is measured before any buyer equity, seller debt, or other financing is applied, so deal structure cannot get a transaction under it. Owner Buyouts and ESOP and co-op transactions remain exempt. If your purchase price is near the line, assume the requirement applies and build the QoE into your diligence timeline early. The broader lender timeline is covered in From LOI to Close: How to Prepare for Lender & Full Financial Due Diligence.

For QoE providers

For providers, a buyer-side report now has a path into the SBA credit file. It only gets there if the provider passes the lender's vendor list, or if a second approved firm reviews the work.

The timing rule is unchanged too. Under the Preferred Lender Program, the QoE engagement can be completed after the SBA loan number is issued. A provider must be formally engaged with a signed letter on record when that number comes through.

How to prepare before you engage anyone

A few practical steps keep this from becoming a closing delay:

1. Confirm early whether your transaction is covered, using the purchase price before any financing is applied.
2. Ask the lender who must perform the QoE, or who must review a report you already have, and how that review is documented.
3. If you are using a provider that is not on the lender's list, ask whether a second approved firm can review the work, and what that adds to the timeline and the cost.
4. Make sure the engagement letter is signed in time, since a provider must be formally engaged when the loan number is issued.
5. Ask the seller early for the financial records the QoE will need, because the report cannot move faster than the data does.

None of this changes the diligence itself. It decides who does the work, who signs off, and when, and those are the questions that cause delays when nobody asks them early.

Final Takeaway - OAG is an approved SBA Lender at all Nationwide Banks. 

Buyers can now commission the QoE on a covered SBA deal, but the lender still has to stand behind it. Until SBA reconciles the notice and the SOP text, assume the stricter reading: a lender-approved provider reviews the report before it enters underwriting.