SBA Makes Single-Location and Carve-Out Acquisitions Actually Possible

Carve-out acquisitions — buying one location from a multi-location business — have always been conceptually attractive and practically difficult. The problem was documentation. Multi-location businesses file consolidated tax returns. A lender trying to underwrite a single location's performance had to work backward from consolidated financials, making assumptions about cost allocations, shared overhead, and location-level profitability that felt speculative at best.

For most SBA lenders, the uncertainty was a deal-stopper. The category of deals available to buyers was effectively limited to standalone businesses with their own clean tax history.

What Changed in SOP 50 10 8

New SBA guidance effective June 1, 2025 allows lenders to accept CPA-prepared or CPA-reviewed financial statements in lieu of tax returns for single-location carve-outs and franchise carve-outs from larger systems. This is a material change.

A qualified CPA can prepare location-specific financial statements that isolate revenue, direct costs, and allocated overhead for a single unit — giving lenders the underwriting data they need without requiring years of standalone tax filings that don't exist.

Three Levels of CPA Statements

Compiled statements are the most basic — the CPA formats existing data without providing assurance. These work for smaller deals and simpler cost structures. Expect to pay $3,000 to $8,000.

Reviewed statements include limited assurance from the CPA — they've assessed the reasonableness of the numbers without conducting a full audit. These are appropriate for mid-size transactions and carry more weight with lenders. Cost range: $5,000 to $15,000.

Audited statements provide the highest level of assurance and are appropriate for larger acquisitions where the lender requires maximum confidence in the underlying data. Cost range: $10,000 to $25,000.

Who Benefits

Buyers gain access to a much larger universe of acquisition targets — any profitable location within a multi-unit system that an owner wants to exit. Franchise carve-outs in particular are now genuinely financeable, because franchise systems often have granular location-level data that makes CPA preparation straightforward.

Sellers of individual locations gain a cleaner exit path. Previously, selling a single location required finding a buyer with cash or conventional financing. Now there's a clear SBA path.

Lenders get better underwriting data than consolidated tax returns ever provided, because location-specific statements actually show what a lender needs to see.

How to Use This

If you've identified a single location within a larger system that you want to acquire, the first step is engaging a CPA with experience in business acquisitions to prepare location-specific financials. The seller needs to cooperate with access to internal cost data — this is a negotiating point in the LOI phase, not something to figure out after you're under contract.