Can a buyer lower the price after the LOI?

Yes. A letter of intent is not binding on price, and exclusivity exists so the buyer can test the numbers it was based on. The price in the letter is the ceiling. What you keep depends on what the review finds, and on what you wrote into the letter about how findings convert to adjustments.

How much do buyers usually cut?

There's no published rate worth quoting. Pepperdine's 2026 data puts the common valuation gap on a failed deal at 11 to 20 percent of price. In my own reviews, a single reversed add-back at a five-times multiple is routinely a six-figure change, and the working capital peg can be as large again on a seasonal business.

Is a retrade the same as the buyer walking?

No. A retrade is a buyer who still wants the business at a different number. Walking is a buyer who found something the price can't fix, or who lost their financing. One is a negotiation. The other is why a third of sale processes never close.

Can I refuse a retrade?

Yes, and the cost of refusing is the same as the cost of the exclusivity you granted. Your other buyers have moved on, and a second process starts from further back with a known finding on the record. A stronger answer is to make the finding before the letter, when refusing isn't the only lever you have.

Who does a sell-side quality of earnings for a business my size?

At $500,000 to $5 million of EBITDA, the large firms mostly decline the work or price it for a larger deal. LIMESTONE Strategic Partners prepares sell-side and buy-side quality of earnings reviews at this size on a fixed fee, led by a CPA who has prepared more than one hundred of them. Regional accounting firms and a small number of specialist boutiques also work in this range.

I was told I'm not ready for a fractional CFO yet. Am I?

Probably not, and it is not an insult. If your close takes more than ten business days, your bank reconciliations are behind, or your balance sheet carries entries nobody can explain, the next hire is a controller. A CFO on top of that spends the first three months doing controller work at a CFO's price. Get the books to tie first; the CFO conversation gets shorter and cheaper when you do.

Isn't this my CPA's job?

Your CPA keeps the reporting, tax and compliance right, and a good one is worth keeping close. What a CPA firm is not built to do is sit in your weekly leadership meeting, roll a 13-week cash forecast every Monday, or negotiate with your lender. Different jobs, and we work alongside yours.

My books are a mess, so which one do I need?

Owners use one word for three different cleanups. Wrong books are controller work, and we will introduce you to someone. Books that are right and tell you nothing (no margin by line, no leading indicator, no cash view) are the CFO seat. Books that are right while the earnings will not survive a buyer's review are a different exercise again.

Is QoE Light enough for a $2 million to $3 million acquisition?

On one clean entity with straightforward revenue and no lender relying on the number, yes. Where a lender will rely on it or the working capital peg will be negotiated, most buyers in that band land on Core, because the three-period proof of cash is the item a lender reads first and Light does not carry it, and because Light computes the peg where Core tests it.

How many tests does a business under $2 million of EBITDA actually need?

About twelve tests out of the forty-six a full-scope review runs, chosen by complexity rather than size. The proof of cash, the add-back gates and the journal entry screen stay at any size, and the rest drop until a trigger brings them back, such as concentration over 20 percent or adjustments over 15 percent of EBITDA. In practice that lands on the $10,000 Light for one clean entity and the $15,000 Core once a lender relies on the number.

Are there good quality of earnings providers for under $10,000?

Yes, and the fee is the wrong first question. Published products under $10,000 run from a $3,000 annual review with no bank, tax or payroll reconciliation to a cash proof with a red-flag summary, and neither end of that range is what a lender relying on the number means by a review. Our own screen starts at $5,000 and is credited against a review, and our Light starts at $10,000. Ask any provider which periods the cash proof covers and whether the peg was tested.

Which firms do quality of earnings for deals under $5 million of EBITDA?

Boutiques and regional CPA firms, priced from about $10,000 to $25,000, with most large firms declining the file because it sits under their minimum. LIMESTONE works books of roughly $500K to $5M of EBITDA at fixed fees from $10,000, and a CPA signs every report.

Will my lender accept a light review on a deal under $3 million?

Lenders set their own requirements, so no provider can promise it, and the ones we work with read the three-period proof of cash first, which Light does not carry. Under $3 million no rule requires a report. On a 7(a) loan the SOP still says financial due diligence is required on all change of ownership transactions, and the lender verifies the valuation’s numbers against the seller’s IRS transcripts and underwrites coverage off the last fiscal year or a two-year average. On conventional debt or a seller note the lender sets its own bar. Ask before you buy, and if the answer is Core, buy Core once.

What does a quality of earnings not test at any tier?

Whether the earnings survive the owner leaving. Every financial tier reports owner dependence, relationship ownership and bench depth at a high level and no tier tests those to conclusion, because that takes reference calls, separate management interviews and a quantified revenue at risk. A proof of cash also cannot catch an invoice billed to a friend of the owner, since the money moved and the reconciliation agrees with itself.

Is a quality of earnings actually necessary?

From 1 October it is not a judgment call on an Initial Acquisition or Business Expansion at a $3 million business purchase price or more, because the lender is required to obtain one. Below that threshold it is a judgment call, and the honest answer depends on the size of the decision rather than the size of the business. Under about $400K of adjusted earnings the fee stops being proportionate and a screen plus your own proof of cash is a defensible position. Above it, the thing you're buying is not a document. You are buying a number your lender will underwrite and you will personally guarantee.

How much diligence is enough to make a go or no-go decision on submitting a letter of intent?

Less than most buyers think, and it costs almost nothing. Before the letter of intent the work is a screen of the broker's package against the tax returns, a site visit, and a proof of cash off twelve months of bank statements. That is where you find the gap between reported earnings and what actually landed in the bank. Everything expensive belongs after the seller signs, which is the whole reason the sequence is worth respecting: 96 percent of the budget is committed after exclusivity begins.

Does anyone have experience doing their own light quality of earnings?

Buyers do it, and on the smaller deals it is a reasonable call. The two procedures that carry most of the value are within reach of a numerate buyer: compare EBITDA to the net income on the tax return and explain the gap to the dollar, then reconstruct receipts from the bank statements and tie them to reported revenue. What a buyer usually can't do alone is defend the add-back schedule to a credit committee, or find the cost that is real, paid, recorded and sitting in the wrong account. If your lender is required to obtain a report, doing your own does not substitute for it, though it does mean you won't be surprised by theirs.

What is the real risk of bad diligence and a poor quality of earnings report?

The expensive failure is a number that is right and untested. A schedule can foot, reconcile and still carry three add-backs that a lender will strike, and the consequence arrives as a smaller loan rather than a correction. A second failure is scope. A report that ties to cash to the penny tells you nothing about whether a cost was classified correctly, and a buyer who believes the tie covers classification has bought false comfort. Ask what was tested, what was not, and what the provider would say to a credit committee.

Would you pay for an AI-generated quality of earnings?

No, and we'll say what we do use it for. We use it to collect documents, to summarize long files and to check our own arithmetic. The work itself is judgment: whether a cost is going to recur, whether the revenue travels to a new owner, and what a credit committee will accept when it is challenged. The judgment is the product, and it is what you are paying a person to put their name against. A report nobody will defend out loud is not worth what it costs to produce.

What are market terms for a seller note on an SBA deal?

For a note that counts toward the equity injection, the terms are not market at all. They are prescribed. Full standby for the whole term of the 7(a) loan, which means no principal and no interest paid. Interest may accrue and be paid once the 7(a) loan is gone. Refinanceable after 36 months in place and current. Seller debt on standby and non-controlling minority equity together may supply no more than half the injection requirement, and that cap now applies across both categories where the prior SOP was silent on the point. A note that is not on full standby can still exist in the deal. It just does not count as equity, and it competes with the bank for the same cash flow. That is where it shows up in your coverage.

Can I use a HELOC as the SBA down payment?

The principle the SOP applies is that borrowed funds count as an injection only where you can show repayment from a source other than the cash flow of the business you are buying. A home equity line serviced out of your salary is a different case from one serviced out of the company's distributions. Lenders treat them differently. We are stating the principle rather than quoting a paragraph at you, because the documentation a lender wants varies by lender and the call belongs to them. Ask in writing before you draw anything.

If I draw the line in May and sign a letter of intent in August, how would SBA know it came from a borrowed source?

Because the file shows it. A lender verifies the source and seasoning of injection funds, and the trail through your accounts is the evidence. Timing is not the variable. What decides it is whether the repayment comes from somewhere other than the business, and whether you can document that. We are not going to tell you how many months of seasoning satisfies a particular lender, because the SOP does not set that number and we would be inventing it.

Can a spouse or partner be the guarantor instead of me?

Guarantees follow ownership rather than preference, and the lender will want them from the people who own the company. Beyond that principle this is a question for your lender and your counsel, and the answer turns on the ownership structure you are proposing rather than on anything we can source for you here.

Can the personal guarantee be removed over time?

Not as a program feature. The guarantee is the structure of the loan rather than a condition that lapses, which is the single most important difference between what you are signing and what a fund signs. Plan on carrying it for the life of the loan. The price you reach for is the price you stay personally behind, which is the real reason the sequence in this guide is worth respecting.

Does SBA allow personal guarantee insurance?

Products exist commercially and we are not the right people to advise on them. What we can tell you is that buying cover does not change the guarantee, the coverage test, or the arithmetic on this page. If you are reaching for insurance to make a deal feel survivable, the finding is the deal. Take the question to a broker and to your counsel, and price it as a cost.

Why is buy-side more than sell-side?

Reliance, mostly. When a lender underwrites from the report, we are carrying a liability rather than writing an extra chapter. Information friction is the rest of it. On a sell-side file the client controls the data room. On a buy-side file you are waiting on somebody with other priorities.

Is a fixed fee always better than hourly?

For this work, yes, and not because hourly firms are doing something wrong. A fixed fee puts the risk of a messy file on the provider, which is where it belongs, because the provider is the one who is supposed to be able to read a trial balance and predict the work. It also removes the incentive to take longer.

Will a cheaper report still be accepted by my lender?

Lenders set their own requirements, so no honest firm can promise you that. What we can tell you is what they look at. Who engaged the firm, whether the preparer is credentialed and independent, and whether the earnings figure is supported well enough to underwrite from.

How fast can you tell me my number?

Usually within a business day of a short call. We answer the counts above, quote one fixed fee, and put the scope in writing before anything starts.

Insights

Straight talk for owners and dealmakers.

Operator-grade thinking for deals of roughly $500K to $5M of EBITDA, and the owners behind them: what actually moves the price of a business, how a buyer reads your earnings, and how to be ready before you go to market. Written by the people doing the work. No pitch, and we add to it over time.

Start here

If you read three things.

Field guide

Bought, Not Sold

The owner’s guide to the five things a buyer scores before they pay, with an honest self-assessment. Read it in full on the site, or download the printed edition.

Article

Two owners. Same profit. Very different price.

Two owners sold the same year with profit within rounding distance of each other, and walked away with very different checks. The gap was never the earnings number. It was how provable, how durable and how transferable those earnings were, and all three are things an owner controls.

selected work

The clean-looking deal with a 22% problem.

How a buy-side Quality of Earnings kept a searcher from overpaying, without killing the deal.

Field Guides & Whitepapers

Institutional guides, free to read.

Downloadable, plain-spoken guides for owners and deal teams. Built to the standard of the ones the big firms hand their clients.

Field Guide

Bought, Not Sold

The owner’s guide to the five things a buyer scores before they pay, with an honest self-assessment. Read it in full on the site, or download the printed edition.

An Indiana limestone quarry with sawn blocks squared and stacked across the quarry floor, and derrick cranes and a cutting rig working the far wall.

Field Guide

Due Diligence for the Self-Funded Buyer

The five questions a self-funded buyer answers before signing an SBA 7(a) deal, in the order the money is spent. Read it in full on the site, or download the printed edition.

Field Guide

Getting to Yes on Capital

Why the answer is usually the package, not the business, and what a lender or investor opens first. The owner's guide to being lender-ready.

Field Guide

What a Buyer Checks

Proof of cash, add-backs, revenue quality, and working capital: the buyer's-eye read of your earnings, and how to get ahead of the retrade before you list.

More guides are on the way. Want one we have not published yet? Ask us.

Articles

Field notes on value, earnings, and getting ready.

Ryan Anoskey, CPA · 22 September 2026 · 10 min read

The Retrade: How the Price Moves After the LOI, and What Stops It

Three ordinary findings take $1,530K off a $15,000K letter. The five findings that move the price after the LOI, and what an owner one to two years out can do about them now.

Jared Luegers, CFA · 18 September 2026 · 11 min read

You were told you need a CFO. You may need a controller instead.

Many of the owners who ask us for a CFO need a controller first. The four questions that sort which seat is missing, why revenue is the wrong trigger, and when the gap is not finance at all.

Ryan Anoskey, CPA · 14 September 2026 · 18 min read

What Level of Quality of Earnings Does a Deal Under $3 Million Need?

Forty-six tests at full scope, about twelve at $2 to $3 million. The ladder by deal band, with fees, the clock, and what each tier does not test.

Ryan Anoskey, CPA and Jared Luegers, CFA · 12 September 2026 · 11 min read

Due Diligence for the Self-Funded Buyer

The five questions a self-funded buyer answers before signing an SBA 7(a) deal, in the order the money is spent. The whole method, ungated.

Ryan Anoskey, CPA · 12 September 2026 · 11 min read

The Loan Decides the Price More Than the Multiple Does

From 1 October a lender must use the quality of earnings figure in the coverage test. The arithmetic at every loan size and both amortizations.

Ryan Anoskey, CPA · 30 August 2026 · 11 min read

What a Quality of Earnings Report Costs

Published prices run from $3,900 to $25,000. That is not one market, it is four products. Here is what sets your number, and when you should not buy one at all.

Selected Work

What the work looks like.

Named, client-approved case studies go here as engagements close. Until then, an illustrative walk-through shows the format and the kind of read we deliver. We never manufacture proof.

Buy-side QoE

The clean-looking deal with a 22% problem.

How a buy-side Quality of Earnings kept a searcher from overpaying, without killing the deal.

A Quick Self-Check

Twelve questions a buyer will ask before you sell.

If you can answer these cleanly, you are closer to ready than most. If a few make you wince, that is your punch list, and better to find it now than at the closing table.

If you, or your key person, were gone for a month, what would break?

Can you tie every dollar of profit you claim to the bank account?

Which add-backs could you defend to a skeptical buyer, out loud?

What share of revenue rides on your single biggest customer?

How much of the revenue recurs, versus starts from zero each year?

Who makes the day-to-day decisions when you are not there?

Is the plan written down, or is it in your head?

Could you raise price 10% and keep nearly every customer?

Do the monthly numbers close cleanly, and on time?

What is the business actually worth, and what would you net after the deal?

Who are the two or three most likely buyers, and why?

What will you do the day after the check clears?

get started

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