Quality of earnings report vs Scalerify Verified: which one does your Amazon deal need?
The SBA requires a quality of earnings report for initial acquisitions at a purchase price of $3 million or more, and a lender can ask for one below that. A Scalerify Verified report fits earlier: before the LOI or exclusivity, on Amazon deals from $250K to $3M. It does not replace a quality of earnings report.
How do they compare?
They answer different questions at different moments. A quality of earnings report tells a lender what earnings to underwrite. A Verified report tells a buyer, before committing, whether an Amazon brand’s earnings hold up against its own payout records and the bank.
| Quality of earnings report (SBA) | Scalerify Verified | |
|---|---|---|
| Scope | A normalized, adjusted earnings figure. Documents every add-back and adjustment, assesses the quality and sustainability of revenue, including customer concentration, and includes a cash proof covering the trailing 12 months and the last two fiscal years. | An Amazon brand’s P&L rebuilt from Amazon’s payout records and matched to the bank to the cent, a Score from 0 to 100 across six pillars, a risk register graded fatal, priceable or fixable, and debt service coverage at 1.25x stated as a finding. |
| Sources | Accountant-prepared financial statements, tax returns, internal financial statements, IRS transcripts, and bank statements for the cash proof. | Amazon’s records through one authorization on the Selling Partner API, revocable and with nothing changed on the account, plus bank statements and supplier invoices. |
| Turnaround | Typically 30–45 days. | 48 hours. |
| Price | Typically ~$8K–$30K for small deals. | Red Flag Scan free. Deal-Killer Report $2,500 (asking price under $1M) or $3,900 ($1M–$3M); the first three clients pay $1,500 in exchange for a named case study. See pricing. |
| Who orders it | For an SBA loan, it is conducted for the benefit of the lender and must not be prepared by or for the seller. A buyer may commission one for their own diligence; the lender relies on it only after a review by one of its approved vendors. | A buyer, before the LOI or exclusivity. Or a seller, before listing. |
| What it is not | Not a business valuation. The SBA requires one in addition, requested by and prepared for the lender, and total acquisition debt is limited to the value it supports. | Not an audit, a quality of earnings report, a valuation, investment advice or a commitment to lend. |
How much does a quality of earnings report cost?
A quality of earnings report typically costs about $8,000 to $30,000 for a small deal, and $20,000 to $35,000 for a business under $10 million in revenue, depending on scope and provider. It typically takes 30 to 45 days. A Scalerify Deal-Killer Report is $2,500 for asking prices under $1M and $3,900 from $1M to $3M, and takes 48 hours from complete data; the first three clients pay $1,500 in exchange for a named case study. See pricing.
The two are not substitutes. Where a quality of earnings report is required, a Verified report does not replace it; it tells you, before you pay for one, whether the deal is worth taking that far.
When is a quality of earnings report required?
Under SBA SOP 50 10 8.1, for applications issued an SBA loan number on or after October 1, 2026, a quality of earnings report is required for an initial acquisition or a business expansion when the purchase price is $3 million or more. The threshold is measured before buyer equity, seller debt or other financing. Owner buyouts and ESOP transactions are not subject to it.
When it is required, it carries weight: the lender must use the earnings from the quality of earnings report in the debt service coverage test. If coverage at that figure does not support the price and the debt, the loan amount must be reduced, and additional equity can make up the difference. The details are in what SOP 50 10 8.1 changes for Amazon acquisitions.
When is a quality of earnings report the better choice anyway?
Even below $3 million, there are deals where you should commission one.
- The lender asks for it. A lender can require more than the SOP does. Its credit policy decides.
- The business is more than an Amazon account. Several entities, related-party transactions, material sales outside Amazon, or a switch between cash and accrual accounting: these are exactly what a quality of earnings report is built to normalize, and what a Verified report does not set out to cover.
- The structure is complex. An earn-out, a seller note, a partial sale or several buyers make the adjusted earnings figure the center of the negotiation. That figure should come from a quality of earnings report.
When is a Verified report enough?
Earlier in the deal, and on Amazon deals from $250K to $3M, where the SOP requires no quality of earnings report but the 1.25x test on historical earnings applies all the same.
- Before the LOI or exclusivity. More deals are lost to what diligence turns up than to the bank, and by then two to three months of exclusivity have often gone by. A Verified report puts those findings in front of you in 48 hours, before you commit.
- Before you list. A seller can have the brand verified first, fix what can be fixed, and show every buyer the same file.
- When the question is the Amazon side. Do the payouts reconcile to the bank? Do the earnings cover 1.25x? Who owns the trademark, the formula, the account? That is the core of an Amazon deal, and the core of the report. See it in the sample report.
Can you use both?
Yes, in sequence. Use a Verified report to decide whether a deal is worth an LOI, and test coverage on the verified earnings in the DSCR calculator. If the deal goes ahead at $3 million or more, or the lender asks for it, commission the quality of earnings report next. Lenders can read the Verified file for free; what it contains for a lender is on its own page.
Questions
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How much does a quality of earnings report cost?
Typically about $8,000 to $30,000 for a small deal, and $20,000 to $35,000 for a business under $10 million in revenue, depending on scope and provider, with 30 to 45 days to complete. A Scalerify Deal-Killer Report is $2,500 for asking prices under $1M and $3,900 from $1M to $3M, the first three clients pay $1,500 in exchange for a named case study, and it takes 48 hours from complete data. It does not replace a quality of earnings report where one is required.
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Does the SBA accept a Scalerify Verified report instead of a quality of earnings report?
No. Where SOP 50 10 8.1 requires a quality of earnings report, at a purchase price of $3 million or more for an initial acquisition or a business expansion, a Verified report does not satisfy that requirement. It is not an audit, a quality of earnings report, a valuation, investment advice or a commitment to lend.
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Is a quality of earnings report required for an Amazon deal under $3 million?
Not by the SOP. The $3 million threshold is the purchase price before buyer equity, seller debt or other financing. Below it, the 1.25x coverage test on historical earnings still applies, and a lender can ask for more than the SOP requires.
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Who can perform a quality of earnings report for an SBA loan?
An independent, experienced financial professional, for the benefit of the lender. The report must not be prepared by or for the seller. A buyer may commission one for their own diligence before approaching a lender; the lender can then have it reviewed by one of its approved vendors, and may not rely on it without that review.