Most sellers hear the sell-side QoE pitch as pay a few thousand dollars to have someone go looking for problems in your own business. Put that way, nobody would do it.
Here's the part that actually matters. Something is going to test your numbers before this deal closes. The only real question is whether that happens on your calendar or the buyer's.
Usually the deal doesn't die. It just gets repriced.
Say a business goes to market at $1.2 million of SDE. The buyer's provider works through it and lands at $1.02 million, mostly on add-backs that were fine in substance but couldn't be supported the way they were presented: a market adjustment shown as one net line, personal expenses with no invoices behind them, a one-time cost that shows up in all three years.
At a 3.5x multiple, that's $630,000 off the ask. And the damage is worse than the arithmetic looks, because now the buyer is negotiating from a position where your number turned out to be wrong. Every request after that gets easier for them to make.
Find and fix or explain those same adjustments before you go to market, and they cost you nothing.
This is changing fast, and the new SBA rule is why.
Under SOP 50 10 8.1, the buyer's Quality of Earnings report on any deal over $3 million is commissioned by the lender and prepared for the lender. Proof of cash is expected. That means every seller in that range is going to have their deposits tied to their revenue by someone whose duty runs to the bank, not to getting the deal closed.
Brokers who've been through one deal that fell apart at that stage are starting to do the work upfront. My guess is sell-side QoE becomes standard on the upper half of the market within a year, for a simple reason: a broker who can hand a buyer a supported number closes faster and at a better price than one who can't.
Not always. Here's the honest test, and it's just whether any of these are true:
If none of those apply, and you've got accrual books, clean support, and modest adjustments, you probably don't need one. I'll tell you that.
If a full engagement is more than the deal warrants, there's a narrower version that captures most of the value: proof of cash plus an add-back support review.
Tie the deposits to the revenue, then go through every adjustment in the recast asking one question: what document supports this. Those two procedures catch most of the surprises we find on the buy side. It's a fraction of the cost of a full sell-side engagement, and it removes most of the repricing risk.
It doesn't make your number bigger. Once in a while an engagement finds understated earnings, usually where an owner was conservative about what they added back, and that's a good day. But that's not the pitch.
It also doesn't bind the buyer. Their provider is going to do their own work, and under the new rule the lender's provider will too. What a sell-side report does is make sure that when they do, they land close to your number, with the reasoning already documented, instead of finding something about your own business you didn't know. If you want the full list of documents a buy-side provider will ask for, we've written that up too, since it's the same set either way.
That's the whole product. No surprises, and it happens on your schedule instead of theirs.