How a Provisional PPA Report Can Strengthen Your Loan Application and Satisfy Bank Requirements

By Inkoo Lee, CPA, CBV, CFA

If you’re applying for a loan under the Canada Small Business Financing Program (CSBFP), your bank may ask for more than just a business plan, prepared by a CPA or CA. Many lenders require a professional report prepared by a Chartered Business Valuator (CBV), including a valuation of intangible assets and an opening balance sheet for the acquiring business.

That’s exactly what I helped a recent client with a Provisional Purchase Price Allocation (PPA) Advisory Report that met the bank’s due diligence requirements and supported a successful loan application.

Here’s how it works — and how it can help you.

What Is a Provisional PPA Report?

A Provisional PPA Report estimates the fair value of the assets in a business acquisition, including both tangible and intangible assets, such as customer relationships or brand.

In a recent case, the client was:

• Acquiring business assets for $300,000
• Applying for a $300,000 term loan and $100,000 line of credit
• Required by the bank to submit a formal report by a CPA, CA, and CBV

The report included:

• Valuation of customer relationships using the Multi-Period Excess Earnings Method (MEEM) method
• Opening balance sheet aligned with accounting standards
• 5-year financial projections
• Debt service coverage analysis (DSCR)
• Fair value assessments for equipment and inventory

Why This Report Matters for CSBFP Applications

The CSBFL Program is a powerful funding source for small business owners. But most banks will not rely on internal projections or informal appraisals. They need credible, third-party documentation that meets specific standards.

The PPA report helps by:

• Demonstrating the fair value of what’s being acquired
• Supporting prudent credit assessment by lenders
• Meeting CPA and CBV requirements outlined by banks
• Saving clients time and avoiding back-and-forth with bank representatives

Why Clients and Banks Trust This Approach

As a CPA, CBV, and CFA, I specialize in advisory reports that meet both lender expectations and business needs. My reports are:

• Professionally prepared, with supporting schedules and assumptions
• Customized to reflect the borrower’s actual deal and business plan
• Easy for lenders to review
• Delivered with a focus on clarity, compliance, and credibility

Who Should Consider This Service?

• Entrepreneurs acquiring a business with CSBFP funding
• Accountants supporting clients applying for bank loans
• Business brokers helping prepare for transactions
• Bankers looking to refer trusted professionals
• Small business owners needing structured guidance

If your bank is asking for a valuation or opening balance sheet prepared by a CPA or CBV — or if you want to be proactive in preparing a strong loan package — this service is designed for you.

Ready to Strengthen Your CSBFP Loan Application?

At PVA, we specialize in preparing valuation reports and business plans that meet the documentation requirements of lenders under the Canada Small Business Financing Program (CSBFP).

Whether you’re acquiring a business, applying for a term loan or line of credit, or need to support your application with a CPA- or CBV-prepared report, we provide:

• Provisional Purchase Price Allocation (PPA) reports
• Intangible asset valuation (e.g., customer relationships and brand)
• Financial projections and opening balance sheets
• Advisory support aligned with lender expectations

Our reports are tailored, reliable, and designed to give your bank the confidence it needs to proceed.

Learn more about our business plan services for loan applications.

Let’s discuss how we can support your next financing project.

Call us today!

Resources:

Government of Canada, CSBFP pamphlet

Government of Canada, Canada Small Business Financing Program Guidelines