Hello,
I understand SBA lending require tax return numbers to be match the PnL. Is this the case with conventional lending, or will a Quality of Earnings be used to underwrite the deal?
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The difference between accrual and cash basis accounting is simply timing. This is what the statement of cash flows proves and is the reconciliation of cash in/cash out for accrual basis accounting.
Additionally, the business should be able to ask their tax accountant for book to tax Reconciliations if not required to file with the tax return.
QofE is to strip out non ordinary and unusual accounting practices, i.e. to prove out the quality and reliability of the numbers reported and to bring the financials into compliance with GAAP (or whatever the required basis of accounting is)
As long as you can bridge tax to book, you should be OK.