For most deals, after. The usual sequence is a signed LOI with an exclusivity period, then the QoE inside that window, then the final price and the purchase agreement. Before an LOI, the company commonly will not hand over bank statements, the general ledger and tax transcripts, and there is often no lender in place yet. What a buyer can do before the LOI is a lighter read of the numbers on hand, and an LOI written so the QoE can still move the price.
Before the LOI, a buyer usually has the confidential information memorandum (CIM), summary P&Ls and sometimes the filed tax returns. The buyer may be one of several people looking at the business. The company has no reason to open its books to all of them.
The LOI sets the headline price, the structure, an exclusivity period and a diligence period. It is commonly non-binding on price. Once it is signed, the full document request goes out, the QoE starts, the lender underwrites, and attorneys draft the purchase agreement.
Access. A QoE runs on source documents. Tying revenue to bank deposits needs the bank statements for the full period. Testing add-backs needs the invoices and statements behind them. The management Q&A needs management. Companies commonly hold these back until a buyer has signed and committed to exclusivity.
The lender. Under SBA SOP 50 10 8.1, effective October 1, 2026, Initial Acquisition and Business Expansion loans where the business purchase price is $3 million or more need a QoE from an independent financial professional engaged by and acting on behalf of the lender. A report the buyer commissions on its own does not meet that requirement. The threshold is the price in the purchase agreement less owner-occupied real estate at appraised value. The buyer's equity injection and any note carried back by the owner are not deducted. How that is measured is covered in the $3 million SBA threshold, explained. Lenders often issue terms off a signed LOI, so a lender-engaged QoE tends to start after it. Confirm with your lender how they apply the rule to your deal.
Cost. A QoE before the LOI is paid for whether or not you win the deal. If another buyer signs first, the money is gone.
The risk is not starting after the LOI. It is starting late after the LOI.
A QoE generally takes two to four weeks from receipt of documents. The company's response time sets most of the pace. If documents arrive three weeks into exclusivity, the report lands near the end of it, with lender underwriting and the purchase agreement still to finish. Findings that arrive late leave little room to negotiate, and extending exclusivity needs the company to agree.
There is also the anchor. Once an LOI is signed at a number, moving it takes a documented reason. A QoE supplies one: the difference between the CIM figures and the tested figures, item by item, with the support behind them.
An illustration with round numbers. A buyer signs an LOI at 3.5 times $1,000,000 of SDE from the CIM, or $3,500,000. The QoE finds $150,000 of add-backs with no documents behind them and $50,000 of revenue that cash-basis timing pulled into the trailing twelve months. Tested SDE is $800,000. At the same multiple, that is $2,800,000. Whether the multiple holds is a negotiation. The QoE gives both sides the number and the documents.
Before the LOI, you can compare the CIM to the filed tax returns if the company shares them. You can look at revenue and margin trends across years. You can list the add-backs and ask what documents support them. You can ask about customer concentration and about receivables, inventory and deferred revenue, so the LOI addresses working capital.
Some providers sell lighter recasts at a lower price. These are commonly used before an LOI to decide whether a deal is worth pursuing. They usually do not include proof of cash, tax return reconciliation or a management Q&A. The QoE providers compared page sets the tiers side by side.
| Pre-LOI look | QoE after the LOI | |
|---|---|---|
| Documents | CIM, summary P&Ls, sometimes tax returns | Bank statements, general ledger, three years of filed returns, IRS transcript data |
| Revenue tied to bank deposits | No | Yes |
| Add-backs | Listed and questioned | Tested against documents |
| Working capital | Raised as a question | Part of the analysis |
| Management Q&A | Informal, if any | Full, with answers written down |
| Meets the SBA lender requirement on $3 million and up | No | Yes, when engaged by and acting on behalf of the lender |
| Cost if you lose the deal | Low | The full fee |
A pre-LOI look narrows the questions. It does not answer them. Earnings that look clean on a CIM can still move once deposits, returns and the ledger are side by side.
This is a question for your attorney, and the exact wording is theirs. Buyers commonly include a few things:
Send the document request the day the LOI is signed, or ask the company to start gathering beforehand. Documents can come in before the engagement letter is signed, which saves time. The list is in what to have ready before a QoE starts.
When the company's owner orders it. A business owner preparing to sell can commission a QoE before going to market and find the problems before a buyer's QoE does. That report is the company's. On SBA deals at $3 million and up, the lender still needs its own engaged report.
A buyer can also start earlier when the company is willing to share full documents before signing, and the buyer accepts the cost of a deal that may not close. That is less common, and the work is the same as after the LOI.
Yes, if the company provides the documents. The scope and fee are the same as after the LOI: $7,500 flat for SBA-sized deals, whether or not SBA financing is used, with larger deals scoped and priced after a call. Details are on the pricing page.
Long enough for the company to deliver documents, two to four weeks of QoE work, lender underwriting and the purchase agreement. The company's response time drives most of it. Confirm with your lender and attorney.
The usual paths are a lower price, a change in structure or ending the deal. The report gives the documented difference behind any of them.
On SBA loans where the purchase price is $3 million or more, the lender. Below that, either can. Confirm the lender's preference before the engagement letter is sent.