By Wes Lewison · Changing Owners · ← All resources
On August 14, 2026 the SBA released SOP 50 10 8.1 — the rulebook every SBA lender underwrites from — and it takes effect October 1, 2026. Because most business acquisitions in the lower middle market are SBA-financed, these rules quietly decide what buyers can pay, how deals get structured, and which listings lenders will fund. Here is what changed, from the seller’s side of the table.
For acquisitions with a business purchase price of $3,000,000 or more (excluding owner-occupied real estate), lenders must obtain an independent Quality of Earnings report — including a “cash proof” reconciling bank statements to tax returns — and the QoE earnings drive the loan’s coverage math. We have been telling sellers for years that a sell-side QofE pays for itself; as of October it isn’t just smart preparation, it’s the price of admission at $3M and up. Sellers who walk in with verified earnings control the narrative; sellers who don’t will have a lender-ordered report define their business for them.
Two changes work together here. Total transaction debt is now capped at the appraised value of the business — any premium above appraisal must come from the buyer’s equity or a seller note on full standby. And debt-service coverage for an initial acquisition rises from 1.15x to 1.25x, calculated on historical or adjusted earnings only — lenders may no longer rely on the buyer’s rosy projections. Translation: asking prices must be defensible with real numbers and real comparables. That is exactly what a properly built Broker Opinion of Value establishes before you ever go to market — and every change of ownership now also requires a valuation from a credentialed source (the old self-valuation shortcut for smaller deals is gone).
Seller financing remains a powerful deal tool — often the cleanest way to bridge a gap above appraised value — but the terms tightened: a seller note must now be in place and current for 36 months before it can be refinanced (up from 24), and standby seller notes can supply at most half of the buyer’s required 10% equity injection, with the rest coming from the buyer’s own cash. If you are open to carrying a note, plan for it to stay in place longer — and price the interest accordingly.
The permitted consulting period for a departing seller doubles to 24 months. For owners who want a gradual handoff — or buyers who want the founder’s knowledge through two full cycles — there is now real room to structure it. Your desired post-sale role is a deal term we list and negotiate from day one.
The 2025-era shortcut — a 25-year term on the entire loan when real estate was 51% or more of proceeds — is eliminated. Terms now use a blended weighted average: the business portion amortizes over 10 years, and only the real-estate portion stretches to 25. Deals that include property still work well; the monthly payment math just changed, and listings should be priced with it in mind.
Which rulebook applies depends on when the SBA issues the loan number: on or before September 30, 2026 — old rules; October 1 or later — new rules. Sellers already near market with a deal that benefits from the old math have a real reason to move now. For everyone else, the theme of 8.1 is unmistakable: preparation is being written into the regulations. Verified earnings, a defensible valuation, and a complete data room were always our process — now they’re the SBA’s expectation too.
