This question comes up on almost every conversation we have with a lender preparing for 1 October, and there is no authoritative answer yet. Here is what is actually known and how we would think about it.
The Quality of Earnings report supplements the business valuation. It does not replace it. Both are required on covered deals and they are separate deliverables answering different questions.
What the language does not do, in the version we have read, is prohibit one firm from producing both. The requirement is that the Quality of Earnings report come from an independent financial professional engaged by and acting on behalf of the lender. Independence there is about independence from the borrower and the seller, not about separation from the valuation engagement.
So on the text: allowed, as far as we can tell. On policy: entirely up to each bank, and most have not decided.
We ran an informal poll of SBA lenders on exactly this. It was small, twenty-two votes, so it is a temperature reading rather than data, but the shape of the answer was clearer than we expected.
The interesting number is the last one. A clear majority of the lenders answering had not formed a view on structure and were treating provider quality as the thing that actually matters. That matches what we hear in conversation: banks are still working out their processes, and a good provider is worth more to them right now than a tidy org chart.
The practical arguments are real.
The two engagements request most of the same documents. Running them together means one request list to the company instead of two overlapping ones, which sellers appreciate and which usually shortens the calendar.
There is also a consistency argument. If the Quality of Earnings work adjusts earnings and the valuation is built on those earnings, the two documents should agree. When they come from different firms with different judgment calls on the same add-backs, reconciling them becomes the lender's job.
And there is one point of contact when the deal team has questions, which matters more than it sounds when a closing date is moving.
The strongest argument against is not conflict of interest in the formal sense. It is that a second set of eyes catches things a single set does not.
A valuation professional reading a Quality of Earnings report produced by someone else will question adjustments they would not have questioned if they had made them. That friction has value, and it disappears when both documents come out of the same review process.
There is also a concentration point. If a single firm's judgment turns out to be wrong on a deal, it was wrong in both documents, and the file has no independent check in it.
If we were setting policy at a bank, we would not write a blanket rule in either direction. We would write two:
First, whoever does the work, require the Quality of Earnings scope in writing and check that it was performed. A single firm doing both with a thin QoE scope is worse than two firms, and two firms with thin scopes are worse than one firm doing it properly. Scope is the variable that actually drives outcomes here, and it is the one most often left unspecified.
Second, require that the valuation state which earnings figure it was built on and whether that figure came from the QoE. When the two documents disagree and nobody says so explicitly, that is where problems hide, and it happens with one firm and with two.
Our guess is that larger lenders will end up separating the two, because process-heavy institutions generally prefer independent checks, and smaller lenders will bundle for speed. Neither will be wrong.
What will separate good outcomes from bad ones is not the structure. It is whether the bank defined what a Quality of Earnings report has to contain before it started ordering them.