How Much Should a Quality of Earnings Report Cost?

For a small business purchase, a quality of earnings report usually costs $2,000 to $40,000, depending on deal size, how clean the books are, and whether a lender sets scope. Under $1 million, a desktop review runs $2,000 to $5,000. At $3 million or more on an SBA loan, SBA rules set a minimum and the fee climbs to match.

Those are ranges I see, not a rate card.

No two jobs are the same, and the spread inside each range comes almost entirely from the seller's records.

What are you actually paying for?

A quality of earnings report answers one question: how much of the profit the seller is showing you is real, recurring, and still there after you own it. The reviewer rebuilds earnings from the records underneath the tax return. Then every adjustment gets tested against evidence.

Think of it as buying somebody else's skepticism.

Size sets the scope. Messiness sets where you land inside it. A clean $4 million shop with a real monthly close and a separate owner card can cost less to review than a chaotic $1.5 million one where the groceries, the boat payment, and the payroll all run through one checking account. For the seller-side view of the same report, read what a quality of earnings report tests when you sell.

What moves the price?

Below is a rough map of how that lands in the small-deal market, again as practitioner observations.

Commingled personal spending, missing months, and a seller who answers email once a week push any of these toward the top of its row.

Why do SBA deals over $3 million cost more now?

For SBA loans numbered on or after October 1, 2026, the SBA's lending rules require a quality of earnings report when a new buyer, or an existing business expanding, purchases a company priced at $3 million or more. That threshold is measured on the full purchase price, before your equity and before any seller note. Most owner buyouts are exempt. The rules also set the scope. The report has to include a cash proof, meaning bank statements reconciled to the income statement and the tax return for the trailing 12 months and the last two fiscal years. It has to tie to IRS transcript data. Owner pay, related-party deals, and customer concentration all get documented.

That scope comes from the SBA, so on these loans it is not negotiable.

Watch for paying twice. The SBA's rules say the report is done for the lender's benefit, and a lender cannot lean on a report you commissioned yourself without a second look. A September technical update lets it accept your report with a reliance letter, which is the reviewer's written permission for the bank to rely on the work, or after a review by a different firm, usually one on the lender's approved list. So before you hire anyone, ask your lender two questions. Who is on your approved list? Will you accept a reliance letter from this firm?

One phone call can save you a five-figure invoice.

How to tell if a quote is too cheap

Cheap is fine when the scope is honest about being narrow. On a $600,000 purchase with tidy books and no bank in the deal, a desktop review that reads the returns and the bank statements and flags the obvious problems is a perfectly reasonable call.

Where cheap goes wrong is a scope that quietly skips the expensive parts, so ask these five questions before you sign anything:

• Does it tie revenue to bank deposits, or does it start from the seller's profit and loss statement?
• Does it check the tax returns against IRS records?
• Does it restate owner pay to what you would pay a replacement?
• Does it give you a monthly view, or three annual totals?
• Who is the report addressed to, and will your lender accept it?
• Is the fee fixed, and what triggers an extra charge, like a missing month or a slow seller?

Skip the first two and a report is just reading the seller's story back to you, with a letterhead on it.

The honest answer

You're asking what the report costs, which is the small question.

The big one is what being wrong costs you after closing.

Small businesses sell on a multiple of earnings. Overstate earnings by $100,000 on a business priced at three times earnings and you overpaid by $300,000. Spend $15,000 on a report that finds half of that and it paid for itself ten times. In the cleanup work I take on, the gap between the profit a seller quotes and the profit that survives a recount usually runs 10% to 25%. That is an observation, not a statistic. It is also the whole case for the fee.

On an SBA deal there is a second edge. Your lender has to size the loan on the report's earnings, at 1.25 times the debt payments for a first-time buyer. If those earnings don't support the price, the loan shrinks and the gap comes out of your equity. Better to learn that before you sign than at closing.

If the seller's books turn out to be behind, that is a job of cleaning up books that have fallen behind, and it belongs to them, not you. Want the numbers checked before you sign? We do that work.

Pay for the scope that matches the risk.

Then read it, because the findings are what you bought.