Present Value is a member of the Society of Business Analysts (SBA). Our company is comprised of certified and designated experts, some with over 40 years of experience, in the industry who service both national and international market segments. This level of experience allows us to consistently provide our clients with exceptional customer service. Along with a solid and honest work ethic, we provide a superior product always compliant with the standards and guidelines of USPAP. Their experience qualifies us to meet the requirements of the Appraisal Foundation, Internal Revenue Service, Lending Institutions and Courts of Law around the country. We work with companies of all sizes, tailoring our expertise to their individual needs.
A Certified Business Appraisal means that the appraisal is USPAP compliant as well as meeting the standards of the Society of Business Analysts (SBA). Our business valuation experts hold multiple credentials and have performed business appraisals for almost every industry.
The Uniform Standards of Professional Appraisal Practice (USPAP) are the generally accepted standards for professional appraisal practice in North America. USPAP contains standards for all types of appraisal services. Standards are included for real estate, personal property, business and mass appraisal.
If you are involved with any of the following business situations, you absolutely need a Business Valuation expert to provide you with a Certified Appraisal Report that states the true and accurate value of your Business.
As a reminder, the SBA issued new SOPs in January that greatly restricted acquisition financing based on an arbitrary goodwill limit of 50% of the loan amount and not to exceed $250,000. Then, after great uproar, the SBA agreed to review loans that exceeded the cap, and was approving the loans.
The newest (effective 10/1) SOP still has special guidelines on dealing with loans based on intangible assets. If the intangible asset value is greater than $500,000, the borrower (or seller through a note), must provide an equity injection of 25% of the purchase price. The loan can still be processed with less than 25% but will require SBA approval/review.
The SBAs SOPs can be found here: http://www.sba.gov/tools/resourcelibrary/sops/index.html
Summary of Major Changes in SOP 50 10 5(B)
Financing a Change of Ownership – INTANGIBLE ASSETS … Including Goodwill -
* Now defines “intangible assets” as including, but not limited to, goodwill, client/customer lists, patents, copyrights, trademarks and agreements not to compete
* Intangibles Policy:
* Change of ownership loans that include purchase of intangible assets are allowed as follows:
EQUITY INJECTION Requirement:
If PURCHASE PRICE includes intangible assets [not just goodwill] in excess of $500,000 then:
* Borrower and/or seller must provide an equity injection of at least 25% of the purchase price of the business to use delegated authority
* Seller Equity = Seller-take back financing that is on full stand-by (no payments of principal or interest) for at least 2 years
* Borrower and seller will agree how much equity each will provide:
Ex: borrower may provide 10%, seller may provide 15%. Total must equal at least 25%
* Exception processing: If the LOAN AMOUNT allocated to intangible assets exceeds $500,000 (i.e., amount for the purchase of intangibles), and there is less than 25% equity injection, loan must be submitted though the Loan Guaranty Processing Center (LGPC). NO processing under delegated authority.
* If purchase price of business includes less than $500,000 for intangibles, the loan can be processed as usual under delegated authority
* Refinancing Seller Take-Back Financing with an SBA Loan -
“The lender may consider refinancing any seller take-back financing with an SBA-guaranteed loan if it has been in place for at least 24 months following the change of ownership and is, and has been, current for the past 24 months. If a business valuation was completed in the last 36 months, a new business valuation will not be required.”
Note: When discussing going concern appraisal requirements, the term “blue sky” has been replaced with “intangible assets”.
The cost of our Business Valuations can vary considerably with different purposes or conditions and the type of report needed. Prices will be quoted after your free consultation and the scope of your needs is determined.