The QoE Mandate Takes Effect October 1. Is Your QoE Desk Ready?
On October 1, 2026, SOP 50 10 8.1 takes effect. For every Initial Acquisition and Business Expansion with a business purchase price of $3 million or more (excluding owner-occupied real estate), the lender must obtain an independent Quality of Earnings report.
$3M+
business purchase price
A buyer- or seller-ordered report does not satisfy the requirement.
The QoE-supported earnings figure is the one that drives your debt service coverage math.
What the new SOP asks of your credit team
-
A QoE commissioned by and prepared for the lender on qualifying Initial Acquisition and Business Expansion deals
-
A cash proof covering the trailing twelve months
-
Coverage of 1.25x on historical, QoE-supported earnings for initial acquisitions; projections no longer count toward the test
-
Under PLP, QoE engagement letters in place when the loan number issues
-
Discretion to require a QoE below $3 million when add-backs, revenue quality, or financial reporting raise questions
Two ways lenders put TradeGauge to work
Mandated
Qualifying deals
Commission lender-ready QoEs for Initial Acquisition and Business Expansion transactions at or above the $3 million threshold.
Discretionary
Any file below it
Use the same verification when add-backs, revenue quality, or financial reporting raise questions below the mandate.
What your credit team receives
-
The workbook (Excel): the quantitative analysis, including adjusted EBITDA, the add-back schedule, proof of cash, and working capital detail
-
The databook (PDF): the qualitative findings and narrative behind the numbers
-
The same structure on every file, reviewed by a human analyst before delivery
Why lenders standardize on TradeGauge
-
Speed that matches loan timelines. 48 hours instead of weeks, so the QoE never becomes the critical path
-
Consistency across the portfolio. Every file reads the same way, which makes review and audit faster
-
Source traceability. Every figure ties to bank statements and the general ledger
-
Every deal in the pipeline. Mandated reports at $3 million and above, and discretionary QoEs on any file below it
Answers for lending teams
