Connecticut Business Brokers

Resources

Resources

Your need resources to buy or sell a business. Connecticut Business Brokers brings years of experience to work on our behalf.

Legal Resources

John Cyril Drapp III

Business Law
Business Contracts, Business Dissolution, Business Finance, Business Formation, Business Litigation, Franchising, Mergers & Acquisitions, Partnership & Shareholder Disputes

Real Estate Law
Commercial Real Estate, Condominiums, Easements, Eminent Domain, Homeowners Association, Land Use & Zoning, Mortgages, Neighbor Disputes, Residential Real Estate, Water Law

Drapp & Jaumann, LLC
53 River Street
Suite 7
Milford, CT 06460
Telephone: (203) 647-3135

Drapp & Jaumann, LLC
44 Waterbury Road
Suite 2B
Prospect, CT 06712
Telephone: (203) 568-0300

SBA Loans

There are Two Types of 7(a) Loans and 504 Loans Click to review

Does SBA require a business valuation?
According to the SBA's Standard Operating Procedures, an independent business valuation is required if: The amount being financed (including any 7(a), 504, seller or other financing) minus the appraised value of real estate and/or equipment is greater than $250,000.

Certified Business Valuation

What is a certified business valuation?

A credentialed business valuation professional will have received extensive training, is in good standing, and follows specific standards and practices to determine the value of a business. These professionals are able to provide a fixed value (based on a specific date) that could be recognized legally.

The Accredited in Business Valuation (ABV®) credential is granted exclusively by the AICPA to CPAs and qualified valuation professionals. The ABV credential gives members an advantage by arming them with the tools and resources needed to provide the best service to their clients and employers.

Approach to valuation:
Three different approaches are commonly used in business valuation: the income approach, the asset-based approach, and the market approach.[6] Within each of these approaches, there are various techniques for determining the value of a business using the definition of value appropriate for the appraisal assignment. Generally,

  • the income approaches determine value by calculating the net present value of the benefit stream generated by the business (discounted cash flow);
  • the asset-based approaches determine value by adding the sum of the parts of the business (net asset value);
  • and the market approaches determine value by comparing the subject company to other companies in the same industry, of the same size, and/or within the same region.

A number of business valuation models can be constructed that utilize various methods under the three business valuation approaches. Venture Capitalists and Private Equity professionals have long used the First chicago method which essentially combines the income approach with the market approach. In certain cases equity may also be valued by applying the techniques and frameworks developed for financial options, via a real options framework.

In determining which of these approaches to use, the valuation professional must exercise discretion. Each technique has advantages and drawbacks, which must be considered when applying those techniques to a particular subject company. Most treatises and court decisions encourage the valuator to consider more than one technique, which must be reconciled with each other to arrive at a value conclusion.

Discounted Cash Flow (DCF)

Discounted cash flow (DCF) is a valuation method used to estimate the value of an investment based on its expected future cash flows. DCF analysis attempts to figure out the value of an investment today, based on projections of how much money it will generate in the future. This applies to the decisions of investors in companies or securities, such as acquiring a company or buying a stock, and for business owners and managers looking to make capital budgeting or operating expenditures decisions.