QoE Prep Review: Streamlined Quality of Earnings Analysis for Business Buyers
The Quality of Earnings (QoE) report has become an essential part of the SBA acquisition process. But not every buyer needs — or can afford — a $25,000+ comprehensive QoE from a traditional accounting firm. QoE Prep has entered the market as a focused provider offering structured Quality of Earnings analysis with a systematic, data-driven approach that covers all the critical areas buyers and lenders need to see.
In this review, we’ll examine what QoE Prep offers, how their analysis compares to traditional QoE providers, and whether they’re the right choice for your SBA acquisition.
What Is QoE Prep?
QoE Prep is a financial due diligence firm that specializes in Quality of Earnings preparation for business acquisitions. Their approach is methodical and comprehensive, covering the full spectrum of financial analysis that buyers and SBA lenders require to make informed decisions.
What sets QoE Prep apart is their structured analytical framework. Rather than taking a one-size-fits-all approach, they break down the QoE process into clearly defined components, ensuring that every critical area of the target business’s finances is thoroughly examined.
What’s Included in a QoE Prep Analysis
QoE Prep offers a comprehensive analysis package that covers four major areas of financial due diligence:
1. Quality of Earnings Analysis
The core of any QoE engagement, this component includes:
- QoE Summary: A high-level overview of adjusted earnings and key findings
- Seller Adjustments: Analysis of adjustments the seller has made to present the business in its best light
- Due Diligence Adjustments: Independent adjustments identified through the analysis process
- Recast P&L: A reconstructed profit and loss statement reflecting normalized earnings
- Recast EBITDA Bridge Analysis: A clear bridge from reported EBITDA to adjusted EBITDA, showing every adjustment and its impact
2. Profit & Loss Analysis
A deep dive into the income statement includes:
- Reported P&L: The financial statements as presented by the seller
- Reported P&L Common Sized: Converting line items to percentages for easier comparison and trend identification
- Reported P&L Classified: Categorizing expenses by type for clearer analysis
- Variance Analysis: Identifying and explaining significant changes between periods
- Seasonality: Understanding seasonal patterns in revenue and expenses that could affect cash flow projections
3. Balance Sheet Analysis
Often overlooked in cheaper QoE reports, balance sheet analysis is critical for SBA deals:
- Reported Balance Sheet: Current state of assets, liabilities, and equity
- Variance Analysis: Changes in balance sheet items over time
- Net Working Capital (NWC) Peg: Establishing the appropriate working capital target for the purchase agreement — this is one of the most negotiated items in any acquisition
- AR Aging Analysis: Evaluating the quality and collectibility of accounts receivable
- AP Aging Analysis: Understanding payment patterns and potential hidden liabilities
- Inventory Analysis: Assessing inventory valuation, turnover, and obsolescence risk
4. Concentration Risk Analysis
One of the most important sections for SBA lenders, concentration analysis examines:
- Revenue Concentration: How dependent is the business on its top customers?
- Vendor Concentration: Is the business overly reliant on a single supplier?
- Salesman Concentration: Is revenue tied to specific sales personnel who might leave?
- Type of Revenue Concentration: Breaking down revenue by service/product type
- Employee Concentration: Key person dependencies across the organization
5. Reconciliations
The verification layer that ensures the numbers are real:
- Proof of Cash: Matching reported revenue to actual bank deposits — arguably the most important single analysis in any QoE
- Payroll Reconciliation: Verifying payroll expenses against payroll records
- Book to Tax Reconciliation: Ensuring financial statements align with tax returns
- Revenue Reconciliation: Cross-referencing revenue from multiple sources
Why QoE Prep’s Structured Approach Matters
Many QoE providers deliver a report and leave you to figure out what it means. QoE Prep’s structured framework ensures that:
- Nothing falls through the cracks: Every major area of financial diligence is covered systematically
- SBA lenders get what they need: The analysis covers all the areas lenders typically scrutinize
- Buyers can compare apples to apples: The standardized format makes it easier to evaluate different acquisition targets
- Negotiation ammunition: Clear adjustment schedules give you concrete data points for purchase price negotiations
Who Is QoE Prep Best For?
QoE Prep is well-suited for:
- SBA acquisition buyers who need comprehensive financial diligence for their lender
- First-time buyers who want a thorough, structured analysis they can understand
- Serial acquirers who value consistency in their diligence process across multiple deals
- Buyers of service businesses where revenue concentration and key person risk are critical factors
- Anyone acquiring a business with complex financials that require detailed reconciliation
Key Areas Where QoE Prep Excels
Working Capital Peg Analysis
The net working capital peg is one of the most consequential — and most misunderstood — elements of any acquisition. Getting this wrong can cost you tens or hundreds of thousands of dollars. QoE Prep’s dedicated NWC analysis helps you establish a fair target that protects your interests while remaining reasonable to the seller.
Concentration Risk Assessment
SBA lenders are particularly sensitive to concentration risk. If 40% of a business’s revenue comes from a single customer, that’s a significant risk factor that could affect your loan approval. QoE Prep’s multi-dimensional concentration analysis (revenue, vendor, salesman, employee) gives you and your lender a complete picture of dependency risks.
Proof of Cash
The proof of cash is where many deals fall apart — or where buyers discover the real story behind the financials. By reconciling reported revenue with actual bank deposits, QoE Prep can identify discrepancies that might indicate unreported income, overstated revenue, or other red flags that could impact your deal.
Potential Considerations
- Scope clarity: Make sure to understand exactly what’s included in your engagement versus what might require additional analysis
- Timeline expectations: Confirm turnaround times early, especially if you’re working against a closing deadline
- Deal size fit: Ensure QoE Prep’s services align with your specific deal size and complexity
- Lender acceptance: Verify with your SBA lender that they’ll accept the format and scope of QoE Prep’s deliverables
How GoSBA Loans Works Alongside QoE Providers Like QoE Prep
At GoSBA Loans, we believe that great acquisitions start with two things: solid financing and thorough due diligence. While QoE Prep handles the financial analysis, we handle the financing — and the two processes work best when they run in parallel.
Here’s what GoSBA brings to the table:
- Access to 50+ SBA lenders: We don’t work with just one or two banks. Our network of over 50 SBA lenders means we can find the best terms for your specific deal.
- $320M+ in funded deals: We’ve helped hundreds of buyers successfully close SBA acquisitions, so we know exactly what lenders want to see in your QoE report and application package.
- Free business plan (valued at $2,500–$5,000): Every SBA loan requires a business plan. We provide this at no cost, saving you thousands that you can invest in quality due diligence instead.
- Lender-QoE coordination: We help bridge the gap between your QoE provider and your lender, ensuring the diligence findings are presented in the most favorable light while remaining transparent and accurate.
Think of it this way: QoE Prep tells you whether the business is worth buying. GoSBA helps you actually buy it with the best financing available.
Final Verdict: Should You Use QoE Prep?
QoE Prep offers a well-structured, comprehensive approach to Quality of Earnings analysis that covers all the bases SBA buyers and their lenders need. Their systematic framework — spanning earnings quality, P&L analysis, balance sheet deep dives, concentration risk, and thorough reconciliations — ensures you have a complete picture of the business before committing your capital.
Choose QoE Prep if:
- You want comprehensive, structured QoE analysis
- Concentration risk is a concern for your target business
- You need detailed working capital and balance sheet analysis
- You value a systematic approach to financial due diligence
Consider alternatives if:
- You need heavy deal advisory support beyond financial analysis
- You’re looking for the absolute lowest cost option
- Your deal is a straightforward, simple transaction with clean books
Get Your SBA Financing Started Today
Don’t let financing be the bottleneck in your acquisition. While your QoE analysis is underway, GoSBA Loans can get your SBA loan pre-qualification moving so you’re ready to close as soon as diligence is complete.
Contact GoSBA Loans today to start your SBA acquisition financing with a team that’s funded over $320 million in deals.
