What Is a Certified Valuation Analyst (CVA)? A Guide for Buyers and Sellers

What a CVA Does and What They Produce

A CVA performs formal business valuations using recognized methodologies — income approach, market approach, and asset approach. Their work product is a written report documenting how they arrived at an opinion of value, which methods they applied, and what assumptions they made. The credential requires passing NACVA's examination, completing a case study, and maintaining continuing education. It carries professional liability and is defensible in court.

In a typical small business acquisition, a CVA engagement produces one of three outputs:

1. A full comprehensive report — $8,000–$15,000, 40–80 pages, defensible in litigation and IRS proceedings 2. A summary report — $4,000–$8,000, condensed findings with full methodological rigor 3. A calculation of value — $2,500–$5,000, a limited-scope engagement applying agreed-upon methods without full report documentation

SBA lenders typically accept a calculation of value or summary report for loans under $5M. For partnership disputes, estate tax filings, and litigation, a comprehensive report is standard.

CVA vs. Business Broker: When You Need Each

A business broker provides a market opinion of value — based on comparable transactions and buyer demand — but it is not a certified appraisal. It is marketing guidance. A CVA provides a certified opinion using GAAP-consistent methodologies that hold up to professional scrutiny.

You need a CVA in these situations:

SBA 7(a) loans over $250K — SBA SOP 50 10 requires a third-party business valuation from a qualified source for most change-of-ownership loans. CVAs, ABVs, and ASA members satisfy this requirement.

Buy-sell agreement disputes — When co-owners disagree on value in a buyout, a CVA opinion is the standard resolution. Courts accept CVA reports as expert testimony.

Estate and gift tax transactions — Transferring business interests requires a qualified appraisal under IRS regulations. A CVA satisfies the IRS qualified appraiser standard.

Divorce proceedings involving a business — Both sides typically hire their own CVA; the court weighs the opinions.

Where a broker opinion is enough: pre-sale pricing, listing price validation, and M&A negotiations between sophisticated parties. If the deal has no SBA financing, no litigation, and no tax event, a broker's comp-based opinion is usually sufficient — and far cheaper.

The Three Valuation Methods CVAs Use

Income Approach — most common for operating businesses. A CVA calculates present value of future expected cash flows. For small businesses this means Seller's Discretionary Earnings (SDE) or EBITDA, capitalized at a rate reflecting business risk. A $500K EBITDA business capitalized at 20% (a 5x multiple) equals $2.5M value. The cap rate is where CVA judgment matters most.

Market Approach — used alongside income. The CVA identifies comparable transactions in databases like Pratt's Stats, BIZCOMPS, or DealStats. For a $1M EBITDA service business, they might pull 25–40 comparables and derive a supported multiple range of 4.0x–5.5x. See how EBITDA multiples work in small business deals for the mechanics behind this approach.

Asset Approach — used for asset-heavy or distressed businesses. Value equals adjusted net assets: fair market value of assets minus liabilities. Most service businesses are not valued this way — their value is in cash flow, not assets. Used for equipment-intensive manufacturers or businesses being wound down.

Most CVA reports for small business acquisitions weight the income approach most heavily, with market approach as a sanity check.

EBITDA Multiples CVAs Reference for Small Business Deals

CVA market approach analysis draws on published transaction databases. These are the ranges appearing in most lower-middle-market valuation reports:

These are general ranges. Industry, recurring revenue, owner dependency, and market conditions all move where a specific business lands. The CVA's job is to defend where your business sits within the range, not just quote the midpoint.

For a quick directional estimate before engaging a CVA, run your numbers through the DealFlow OS Valuation Estimator. It applies industry-specific EBITDA multiples and produces a low, mid, and high range consistent with current transaction data. It will not replace a CVA for an SBA deal — but it tells you if the CVA's number makes sense before you pay $5,000 to find out.

What CVAs Cost and How to Find One

Fees range from $2,500 to $15,000 depending on business complexity and report scope. A single-entity service business with three years of clean financials sits at the low end. Multi-entity structures with add-backs, related-party transactions, or real estate involvement get expensive fast.

Where to find a CVA: - NACVA's analyst locator at nacva.com - Your SBA lender's approved appraiser list - Your transaction attorney's referrals — M&A attorneys use specific CVAs regularly - Your CPA — many firms have credentialed valuators on staff

What to ask before hiring: - Have you valued businesses in this industry before? - What report format do you recommend for this transaction type? - Is your opinion defensible if the SBA or IRS pushes back? - What is your turnaround time? Standard is 2–4 weeks for a summary report.

Do not hire a CVA solely based on Google results. A bad valuation report wastes time and money if a lender or opposing counsel challenges it. See the SBA 7(a) acquisition guide for the full lender timeline and when to schedule your CVA engagement.

When You Do Not Need a CVA

Most small business transactions do not require a formal CVA opinion.

All-cash or seller-financed deals — No SBA lender means no certified appraisal requirement. Buyer and seller agree on price through negotiation.

Early-stage valuation discussions — A broker opinion or EBITDA-multiple framework is faster and cheaper for setting an asking price. Save the CVA engagement for when a deal is under LOI and the lender asks.

Deals under $250K in SBA loan amount — SBA SOP 50 10 has a simplified approach for smaller loans. Lender discretion applies.

Where buyers and sellers trip up: commissioning a CVA before engaging a broker or lender. The formal report has a shelf life of 6–12 months. Getting one too early means paying twice if the deal timeline extends.

Right sequence: identify the target, get under LOI, then order the valuation simultaneously with lender underwriting. This is also the right time to be actively finding targets through DealFlow OS — surfacing off-market businesses with seller motivation scores so you can move from discovery to buyers faster.

Frequently Asked Questions