SBA's new SOPredactedtakes effect October 1 (Information Noticeredacted, issued Aug 14). It applies to any 7(a) loan that gets its SBA loan number on or after Oct 1 — not the date you applied. If your file is sitting in a lender's queue and won't clear E-Tran by Sept 30, you're under the new rules. TL;DR: the mandatory Quality of Earnings (QoE) rule only hits you if all three are true — 1. SBA 7(a) loan 2. Initial Acquisition or Business Expansion (not an owner buyout, ESOP, or co-op) 3. Business purchase price of $3M or more, measured before your equity injection or any seller note, and excluding owner-occupied real estate Under $3M: no mandatory QoE. Your lender can still ask for one. Many will. $3M and up: the lender orders it, from an independent, experienced financial professional engaged for the lender's benefit. A report you commissioned doesn't count. The seller's doesn't count. The broker's sell-side QoE doesn't count. Every buyer, any deal size: ask your lender this week what earnings figure they're underwriting to and what they need to see behind the add-backs. That one question tells you whether your deal has a problem before the credit committee does. The threshold test, plain English — Is the loan an SBA 7(a)? If yes, keep going. Is it an Initial Acquisition or Business Expansion? If yes, keep going. Is the business price $3M+ (excluding owner-occupied real estate, before equity and seller note)? If yes, the mandatory lender-engaged QoE applies. Any "no" and the mandatory rule doesn't apply to you. A $3.4M deal that's $2.6M business plus $800K building is a $2.6M deal for this test. What still changes for you even under $3M — Coverage is 1.25x for an initial acquisition, on last fiscal year's actual earnings or a two-year average. Projections don't get you across the line anymore. Business-acquisition proceeds carry a 10-year maturity in the calculation. If real estate is included, the lender must use separate loans or a weighted-average maturity — real estate can no longer stretch the entire acquisition loan to 25 years. Higher payment, tighter coverage. 7(a) Small underwriting is gone for every change of ownership, including deals under $350K. Full underwriting now applies on a $600K deal. Seller notes only count as equity if they're on full standby for the life of the loan, and standby notes plus minority equity can't make up more than half of your injection. Why voluntary diligence still matters at $700K: the lender is now underwriting on historical earnings. If the seller's add-backs don't survive a bank-statement tie-out, your coverage ratio doesn't survive either. Cheaper to find that out for $3,500 in September than from the credit committee in November. Full disclosure: I run Mainstreet Advisory (I'm a CPA, CMA). We build buyer-side reports to the same cash-proof format lenders are about to start reading on the $3M+ files. Happy to look at an LOI and tell you what you actually need, no charge either way. Longer version, with the QoE checklist and the three questions to ask your lender: redacted