The Small Business Administration (SBA) requires independent business valuations of the potential acquisition in order for the buyer to secure a SBA Loan. The valuator must consider the market, income, and cost approaches. Methods within each of these approaches include: Gross Revenue Multiplier (Market Approach); Discounted Future Earnings or Capitalized Adjusted Earnings (Income Approach); and Adjusted Book Value (Cost Approach). In all cases, a cash-flow evaluation must be performed.
