What a quality of earnings report tells you

A quality of earnings report, or QoE, looks behind the profit a business reports. It answers one question: how much of those earnings are real, recurring and supported by records?

What it tests

• Whether revenue is real and reaches the bank
• Whether costs are complete and properly recorded
• Whether one-time items are truly one-time
• Whether the owner's add-backs hold up against documents

Why it matters now

Starting October 1, 2026, SBA 7(a) acquisitions of $3 million or more require an independent QoE prepared for the lender, with proof of cash. Buyers, sellers and lenders should plan for it early.

What to gather

Three years of financials and tax returns, monthly trial balances, and all bank statements. Our QoE services page has a full checklist. If you also need a value for the business, see business valuation.