The business-sale environment changed on September 16, 2026.

The Federal Open Market Committee voted to raise the federal funds target range by 25 basis points, moving it to 3.75%–4.00%, effective September 17, 2026. The decision was approved by a 12–0 vote. The Federal Reserve’s accompanying projections also placed the median projected federal funds rate at 4.1% at the end of 2026, although projections are not promises or guarantees of future policy.

Then, on October 1, 2026, SBA SOP 50 10 8.1 takes effect for applicable SBA lending applications issued an SBA loan number on or after that date.

Together, these developments create a more demanding environment for business sales financed through debt.

This does not mean every business becomes harder to sell. It means the difference between a documented, transferable, financeable company and a poorly prepared company becomes more consequential.

The market is increasingly separating businesses into two categories:

1. Companies whose earnings, operations, and documentation can withstand professional underwriting.
2. Companies whose stated performance depends on unsupported adjustments, owner involvement, incomplete records, or assumptions that cannot survive verification.

Quality businesses do not become automatically valuable because interest rates rise. No business is guaranteed a sale, financing, buyer interest, or a particular price.

But when financing becomes more disciplined and underwriteable supply narrows, quality becomes a more visible differentiator.

What Changed on September 16 and What Changes October 1

The Federal Reserve raised the federal funds target range

According to the Federal Reserve’s September 16, 2026 FOMC statement, the Committee raised the target range for the federal funds rate by one-quarter percentage point to 3.75%–4.00%.

The federal funds rate is the rate used for overnight lending among depository institutions. It is not the rate on a business acquisition loan, an SBA loan, a seller note, or a commercial line of credit.

That distinction matters.

A change in the federal funds rate does not mean that every SBA or acquisition loan automatically moved by exactly 25 basis points. Business-loan pricing depends on the lender, loan program, pricing formula, credit profile, collateral, structure, term, market conditions, and other underwriting considerations.

The correct conclusion is narrower:

A benchmark-rate change can influence the broader lending environment, while lenders and underwriting participants independently evaluate loan pricing, repayment capacity, buyer qualifications, transaction structure, and documented earnings.

The Federal Reserve’s September 2026 projections materials show a median 2026 year-end federal funds projection of 4.1%. A majority of the submitted projections placed the year-end midpoint above the current 3.875% midpoint. That is consistent with at least one additional quarter-point increase being reflected in many officials’ projections, but the projections remain subject to change.

For business sellers, the practical issue is not predicting the next Fed decision. The practical issue is understanding whether the business can support a buyer’s financing structure under current underwriting conditions.

SBA SOP 50 10 8.1 raises the documentation standard

SBA SOP 50 10 8.1 becomes effective October 1, 2026, and applies to applicable applications issued an SBA loan number on or after that date.

Coverage from The Coleman Report explains that the revised SOP includes changes affecting change-of-ownership transactions, business acquisitions, equity requirements, working capital structures, and other SBA lending procedures.

For qualifying initial acquisition and business expansion transactions with a purchase price of $3 million or more, excluding owner-occupied real estate, the revised framework requires an independent Quality of Earnings report commissioned by the lender. The report must include a cash proof covering the trailing 12 months and the last two fiscal years. The earnings determined through that process are used in the lender’s debt service coverage ratio calculation.

The updated guidance also establishes a minimum 1.25x DSCR for initial acquisitions, subject to the detailed requirements and transaction classifications in the SOP.

Because the rules affect SBA lending, sellers and buyers should obtain current guidance from their lender, SBA lending professional, CPA, attorney, and other qualified advisors before relying on a particular interpretation.

Why Higher Rates Matter to Business Sellers

The federal funds rate is not an acquisition-loan rate

It is a mistake to tell sellers that yesterday’s 25-basis-point increase automatically adds 25 basis points to every business acquisition loan.

That is not how lending works.

The federal funds rate is one benchmark in the financial system. Business acquisition loans may be priced using different formulas and may include a spread determined by the lender and the transaction. SBA loans may also be affected by program rules, lender policies, and permitted pricing structures.

Still, higher benchmark rates can affect transaction analysis in several ways.

First, a buyer may have less borrowing capacity if the expected payment on a proposed loan is higher than it was under an earlier rate assumption.

Second, higher debt service can reduce DSCR when the business’s cash flow remains unchanged.

Third, a buyer may need to contribute more equity, borrow less, extend the amortization period if permitted, or evaluate a different transaction structure.

Fourth, sellers may encounter greater discussion around seller financing, contingent consideration, earn-outs, or other forms of structure flexibility.

None of those outcomes is automatic. They depend on lender requirements, buyer qualifications, business performance, collateral, transaction size, and the terms negotiated by the parties.

The seller’s responsibility is not to solve the lender’s underwriting model. The seller’s responsibility is to understand the business’s documented earnings and how those earnings may perform under the structure a qualified buyer can actually obtain.

Debt service and transaction structure

A buyer and lender are not underwriting revenue alone. They are evaluating the cash flow available to service debt after considering the operating requirements of the business.

A basic DSCR calculation compares cash flow available for debt service with required annual principal and interest payments:

DSCR = Cash flow available for debt service ÷ Annual debt service

A 1.25x DSCR means the measured cash flow is 1.25 times the required annual debt service. It is not a guarantee of approval, and it is not the only underwriting factor.

A business with $500,000 of reported earnings may not produce $500,000 of lender-acceptable cash flow. The lender may remove unsupported add-backs, question unusual expenses, examine customer concentration, or identify owner-dependent costs that a buyer cannot eliminate after closing.

This is why a seller’s internal profit number and a lender’s underwritten cash flow may differ.

The more expensive or restrictive the financing environment becomes, the less room there may be for unsupported assumptions.

Why the New Quality of Earnings Requirement Changes the Standard

A Quality of Earnings analysis is not simply another version of a business valuation.

A valuation asks what the business may be worth based on financial performance, comparable business sales, industry considerations, risk, and other valuation inputs.

A QofE analysis focuses on whether reported earnings are sustainable, supportable, and properly reflected in the underlying records.

For qualifying SBA-financed transactions, the independent QofE report becomes part of the lender’s underwriting file. The lender uses the analysis to evaluate the cash flow supporting repayment and the DSCR calculation.

That changes the conversation from:

“The seller says the business earns this amount.”

To:

“Can the stated earnings be reconciled to tax returns, bank deposits, platform reports, payroll, general-ledger detail, and other reliable records?”

What a cash proof means

A cash proof is designed to connect reported business activity to actual cash activity.

Depending on the business and lender’s process, that may involve reviewing and reconciling:

• Bank statements
• Merchant processor reports
• Payment-platform records
• Tax returns
• Sales reports
• Accounts receivable
• Payroll records
• Depositor activity
• General-ledger detail
• Revenue by customer or channel
• Refunds, chargebacks, and credits
• Inventory purchases and cost of goods sold

The point is not that every business must maintain identical records. The point is that the earnings supporting a financed acquisition must be believable, traceable, and adequately documented.

For a Tampa HVAC company, that may involve reconciling service-agreement revenue, commercial accounts, deposits, payroll, fleet expenses, and owner compensation.

For a Clearwater or St. Petersburg digital agency, it may involve reconciling client contracts, payment processors, recurring retainers, contractor payments, and project revenue.

For a Florida SaaS, Shopify, Amazon FBA, or e-commerce company, platform data, subscription activity, refunds, advertising expenses, chargebacks, inventory, and payment deposits may all matter.

The business model changes. The principle does not.

Why unsupported add-backs create risk

Seller’s Discretionary Earnings, or SDE, is commonly used for smaller owner-operated businesses. SDE generally attempts to show the total financial benefit available to one working owner by adjusting reported profit for items such as owner compensation, certain personal expenses, and other legitimate one-time or discretionary costs.

EBITDA: earnings before interest, taxes, depreciation, and amortization: is more commonly used for businesses with management depth and a structure that can operate without the owner performing the central role.

Neither SDE nor EBITDA should be treated as a license to add back every expense that appears inconvenient.

An add-back needs a defensible explanation. It should be supported by records and evaluated in the context of the buyer’s future operating reality.

If the owner claims an expense will disappear after closing, the analysis should address whether the expense is genuinely personal, nonrecurring, discretionary, or replaceable.

Examples of potentially difficult adjustments include:

• Personal expenses mixed into business accounts without clear documentation
• Family payroll that performs necessary work
• Owner compensation removed even though a replacement manager is required
• Recurring repairs described as one-time events
• Marketing expenses removed even though revenue depends on them
• Contractor payments excluded even though the buyer needs the same labor
• Inventory losses or refunds treated as unusual when they occur regularly
• Unrecorded cash activity that cannot be reconciled
• Revenue growth assumed without supporting customer, contract, or channel evidence

A strong recast does not merely produce a larger number. It produces a number that can survive questions.

The Supply-and-Demand Shift Favors Transferable Companies

Higher rates and more rigorous underwriting do not eliminate buyer demand for good businesses.

They can, however, narrow the group of businesses that can be confidently financed, transferred, and operated after closing.

That is the supply-and-demand shift sellers need to understand.

The relevant supply is not every business that an owner would like to sell. The relevant supply is the pool of businesses that present:

• Verified and sustainable cash flow
• Clean financial records
• Transferable customer relationships
• Documented operating procedures
• Limited owner dependence
• Reasonable customer and supplier concentration
• Defensible add-backs
• Stable or explainable revenue trends
• Management depth
• Reliable technology and platform access
• A price supported by performance and comparable sales

When the pool of financeable, underwriteable businesses becomes smaller, quality becomes more important.

That does not guarantee a higher multiple or a faster transaction. It does mean that buyers, lenders, and advisors have stronger reasons to distinguish between a business that is merely profitable on paper and one that is genuinely transferable.

This applies across Tampa Bay and Florida.

A well-documented plumbing company in Brandon may be more resilient in underwriting than a similar company whose revenue and customer relationships depend entirely on the retiring owner.

A pool service company in Clearwater with recurring routes, trained technicians, and documented customer records may be easier to evaluate than one where the owner personally handles scheduling, billing, sales, and every customer relationship.

A SaaS company serving customers nationwide may be attractive, but only if its churn, retention, code ownership, subscriptions, platform access, and customer concentration can be verified.

Quality is not a slogan. It is evidence.

Which Businesses Face the Greatest Preparation Risk?

No business should be told that it cannot sell solely because it has a documentation problem.

Businesses with weak preparation may still sell. They may face a harder road, more diligence, more negotiation, greater repricing risk, additional structure requirements, or a longer period of buyer education.

The most exposed businesses generally include those with:

• Negative or negligible earnings
• Unsupported or aggressive add-backs
• Heavy owner dependence
• Customer concentration without contractual protection
• Supplier concentration without alternatives
• Undocumented processes
• Unreconciled books
• Material differences between tax returns and internal reports
• Revenue that cannot be traced to deposits or platform statements
• Real-estate-heavy transaction structures that complicate analysis
• Significant deferred maintenance or capital requirements
• Asking prices unsupported by documented performance or comparable sales
• Business assets owned personally rather than by the operating company
• Digital assets controlled through personal accounts
• Informal contractor or employee arrangements
• Revenue dependent on a single advertising, marketplace, or referral channel

This is not an accusation. It is a preparation diagnosis.

The owner of a roofing company in Lakeland, a distribution business in Plant City, a cleaning company in Wesley Chapel, or an online service business operating throughout Florida may have an excellent business. But excellence must be demonstrated in a format that buyers, lenders, and professional advisors can review.

Seller Preparation Checklist for the New Environment

1. Reconcile the financial statements

Confirm that monthly internal statements reconcile to tax returns, bank deposits, payment processors, payroll, and major expense categories.

Identify unexplained differences before a buyer or lender finds them.

2. Build a defensible add-back schedule

Document every proposed adjustment.

For each add-back, identify:

• The amount
• The reason for the adjustment
• Whether it is recurring
• Whether the buyer will incur a replacement expense
• The supporting documentation
• The expected treatment in a lender’s analysis

3. Separate owner benefit from business cash flow

Determine whether the business is best understood through SDE, EBITDA, or another appropriate measure.

Do not remove owner compensation if the buyer must hire someone to perform the same functions.

4. Prepare a cash-proof file

Organize at least the records likely to be requested in a financial review:

• Bank statements
• Tax returns
• Profit-and-loss statements
• Balance sheets
• Merchant and platform reports
• Payroll records
• Accounts receivable and payable
• Customer concentration data
• Major supplier records
• Inventory reports
• Debt schedules
• Lease and equipment obligations

5. Document how the company operates

Create written procedures for sales, fulfillment, scheduling, purchasing, customer service, billing, hiring, quality control, and daily management.

A buyer is acquiring an operating system: not merely a stream of historical revenue.

6. Reduce owner dependence

Identify the work only the owner can perform.

Then determine what can be delegated, documented, automated, or transferred over a 6–12-month preparation period.

7. Review customer and supplier concentration

Know the percentage of revenue generated by major customers, referral partners, marketplaces, suppliers, and advertising channels.

Concentration does not automatically make a business unsellable. Unexplained concentration creates questions.

8. Protect digital and intellectual property

For SaaS, e-commerce, Amazon FBA, Shopify, digital agency, subscription, lead-generation, and online service businesses, confirm ownership and transferability of:

• Domains
• Source code
• Customer lists
• Social accounts
• Advertising accounts
• Marketplace accounts
• Vendor accounts
• Creative assets
• Trademarks
• Data and analytics accounts
• Contractor-created intellectual property

9. Review the asking price against evidence

An asking price should be connected to financial performance, comparable sales, risk, transferability, and structure.

The number an owner wants is not the same as the value a buyer and lender can support.

10. Coordinate with professional advisors

SBA rules, lending requirements, taxes, legal documents, and accounting treatment require professional review.

Business brokers do not replace CPAs, attorneys, lenders, or certified valuation professionals.

What This Means for Exit Strategy Planning

Exit planning is no longer limited to deciding when to put a business on the market.

The owner must also determine whether the business is ready to be examined by a buyer, lender, CPA, attorney, and possibly an independent QofE provider.

That means timing matters.

An owner who needs to retire within 30 days may have limited ability to correct financial inconsistencies, reduce owner dependence, or document operational procedures.

An owner who begins 6–12 months earlier may have time to:

• Improve bookkeeping discipline
• Reconcile financial records
• Replace informal systems
• Train management
• Reduce customer concentration
• Formalize contracts
• Separate personal and business expenses
• Improve recurring revenue visibility
• Organize digital asset ownership
• Establish a supportable valuation range

Preparation does not guarantee a higher sale price. It creates better information and reduces avoidable uncertainty.

The strongest exit strategy is not based on waiting for the perfect interest-rate environment. It is based on knowing what the business can support today, what it could support after preparation, and what a buyer’s financing process will likely examine.

The $1,500 Broker Price Opinion

For owners earning at least $200,000 in net earnings, owner benefit, or Seller’s Discretionary Earnings, a professional Broker Price Opinion can establish a more disciplined starting point for exit planning.

The $1,500 Broker Price Opinion from Dave Britton, Certified Business Intermediary, through Lobo Business Sales LLC includes:

• Three years of recast cash-flow worksheets
• Recent comparable-business sales
• Relevant valuation multiples and adjustments
• A written opinion of probable market value

The BPO is designed to give a business owner a more informed view of the company before deciding whether to go to market, continue improving the business, adjust expectations, or pursue another exit strategy.

The process is comparable to an ante in poker.

The owner places the ante to see the cards clearly: the business’s probable market value, financial presentation, and valuation factors. Then the owner can decide whether to play the hand by moving toward a sale or fold temporarily and improve the business for another 6–12 months.

The BPO is not:

• A certified business appraisal
• A lending approval
• An SBA QofE report
• A legal opinion
• A tax opinion
• Investment advice
• A guarantee of financing
• A guarantee of buyer interest
• A guarantee of sale price or closing

Formal certified business appraisals generally start at approximately $4,000–$5,000 and increase depending on scope, complexity, purpose, and professional requirements.

A BPO is a separate product. It is a paid, data-backed, locally relevant valuation opinion: not a free estimate and not a substitute for a formal certified appraisal when one is required.

Estimator, BPO, and Formal Appraisal: Three Different Tools

Lobo Business Value Estimator™

The Lobo Business Value Estimator™ is a free initial estimating tool.

Information entered is not stored, and use does not trigger outreach or follow-up.

The Estimator is useful for obtaining an early directional estimate. It is not a BPO and not a formal certified appraisal.

$1,500 Broker Price Opinion

The BPO provides a written opinion of probable market value based on the defined scope:

• Three years of recast cash-flow worksheets
• Recent comparable-business sales
• Relevant valuation multiples and adjustments
• Written opinion of probable market value

It is intended for owners who need a more serious valuation framework before making an exit decision.

Formal certified business appraisal

A formal certified appraisal is a separate professional engagement prepared for a defined purpose under applicable valuation standards.

It may be required for litigation, estate planning, shareholder disputes, tax matters, financing, or other formal purposes. The proper provider and scope depend on the situation.

What This Means for Florida Business Owners

Lobo Business Sales LLC primarily serves business owners in Hillsborough, Pasco, Pinellas, Hernando, and Polk counties, including Tampa, Brandon, Riverview, Wesley Chapel, Clearwater, St. Petersburg, Lakeland, New Port Richey, Spring Hill, Plant City, Lutz, Palm Harbor, Seminole, Largo, Valrico, Dade City, and Zephyrhills.

The same preparation principles apply to owners of:

• HVAC and plumbing companies
• Electrical contractors
• Roofing and landscaping businesses
• Pool service and pest control companies
• Cleaning and route-based businesses
• Manufacturing and distribution companies
• Laundromats and car washes
• Restaurants and bars
• SaaS and e-commerce companies
• Amazon FBA and Shopify businesses
• Digital agencies and online service companies
• Subscription and lead-generation businesses

Lobo Business Sales LLC also works nationally with qualified digital-business owners.

Any business transaction in Florida, including a transaction involving digital assets such as SaaS or e-commerce companies, must be represented by someone licensed in the State of Florida. Owners should confirm the application of licensing requirements with Florida counsel and other appropriate professionals before relying on this statement in a specific transaction.

The relevant question is not whether the owner is ready to announce a sale.

The relevant question is whether the business is ready to withstand examination.

Frequently Asked Questions

Did the Federal Reserve’s 25-basis-point increase automatically raise SBA loan rates by 25 basis points?

No. The federal funds rate is the overnight lending rate set through Federal Reserve policy. It is not the rate on an SBA or business acquisition loan. Lenders independently evaluate pricing, loan structure, buyer qualifications, repayment capacity, and other requirements.

What is changing under SBA SOP 50 10 8.1?

For qualifying SBA-financed initial acquisition and expansion transactions at or above $3 million, excluding owner-occupied real estate, the revised framework requires an independent Quality of Earnings report commissioned by the lender. The report includes a cash proof covering the trailing 12 months and the last two fiscal years, and the earnings are used in DSCR analysis. The revised SOP becomes effective October 1, 2026, for applicable applications issued an SBA loan number on or after that date.

What is a cash proof?

A cash proof reconciles reported earnings to underlying financial evidence such as bank deposits, tax returns, payment-platform reports, merchant statements, payroll, and other records. It is intended to test whether the cash flow presented in the transaction is supported by the business’s actual activity.

Does the new rule mean a business cannot sell if its records are imperfect?

No. Imperfect records do not automatically prevent a sale. They can increase diligence, delay financing, create more negotiation, and increase repricing risk. Preparation should begin before the business is marketed.

What earnings level is appropriate for the $1,500 BPO?

The primary qualification is a minimum of $200,000 in net earnings, owner benefit, or Seller’s Discretionary Earnings. Business value, industry, transferability, and documentation are also relevant to determining fit.

Is the $1,500 BPO a formal appraisal?

No. It is a paid Broker Price Opinion with a defined scope. It is not a certified business appraisal, lender approval, QofE report, legal opinion, tax opinion, investment advice, or guarantee.

Should a seller use the Lobo Business Value Estimator™ before ordering a BPO?

The Estimator can be used as an initial step. It is free, does not store information entered, and does not trigger outreach or follow-up. It does not replace the $1,500 BPO or a formal certified appraisal.

Final Takeaway for Business Sellers

Higher rates do not punish every business equally.

New SBA underwriting requirements do not make every transaction impossible.

They do make unsupported earnings, undocumented operations, owner dependence, and weak financial records more difficult to defend.

The businesses most likely to receive serious consideration are not necessarily the businesses with the highest revenue. They are the businesses whose earnings can be verified, whose operations can transfer, and whose transaction structure can survive professional review.

If your business produces a minimum of $200,000 in net earnings, owner benefit, or Seller’s Discretionary Earnings, contact Dave Britton to order your $1,500 Broker Price Opinion through Lobo Business Sales LLC.

Order or inquire about the $1,500 Broker Price Opinion through LoboBusinessSales.com

Owners who want to begin with an initial estimate may use the Lobo Business Value Estimator™.

The objective is not to create urgency. It is to establish clarity before a buyer, lender, or QofE provider establishes it for you.

About the Author

Dave Britton is a Certified Business Intermediary (CBI) and licensed business broker providing seller-focused business brokerage services through Lobo Business Sales LLC. The firm supports qualified owners with business valuation, exit planning, confidential business sales, and transaction preparation throughout Tampa Bay and nationally for digital-based businesses.

Disclaimer

This article is for general informational purposes only and does not provide legal, tax, accounting, lending, investment, valuation, or financial advice. SBA rules, lending requirements, DSCR calculations, QofE procedures, licensing requirements, transaction structures, and tax consequences should be reviewed with qualified professionals familiar with the specific facts of the transaction. A Broker Price Opinion is not a certified business appraisal, lending approval, legal opinion, tax opinion, investment advice, or guarantee of value, financing, buyer interest, sale price, or closing.

Licensed Business Broker services provided by,

Dave Britton, Certified Business Intermediary (CBI)
Lobo Business Sales LLC
Member: BBF & IBBA
Supporting small businesses throughout Tampa Bay
Veteran-Owned Business.