ATLANTIC HIGHLANDS, NJ – February – For those of you that attended my presentation on SOP 50-10 (5) as it relates to Business Valuation, thanks for the participation. As a follow up, I wanted to touch on a very important issue related to SOP 50-10 (5) A) Page 139 section F. Change of Ownership (13 CFR 120.202) 7 b) 2 as follows: “The lender may finance a limited amount of goodwill. In no event may the amount of goodwill financed by an SBA guaranteed loan exceed 50% of the loan amount up to a maximum of $250,000”. The ramifications related to the implementation of this amendment are significant. The Government is implementing policy changes to help aid the SBA 7a loan program including waiving loan fees, increasing the guarantee and earmarking funds for the program. However, all of these positive policy changes are negated by the proposed $250,000 cap on the financing of Goodwill. All of the professional practices such as medical and dental practices, CPA firms, and pharmacies that I have appraised have had a substantially higher goodwill component relative to its hard assets. In many cases the goodwill is in excess of 80% of the sale price. Also, according to SBA Lenders, these types of companies have a lower default rate than their counterparts that have significant fixed assets. As such, the implementation of a $250,000 cap on Goodwill effectively limits the program to loans of $500,000 or less. Any one who would like a copy the 50 10 (5) (A) feel free to reply back and I will e-mail it to you. Sincerely, John T. Bechtold, President Accredited Valuation Services, Inc.