CBB Cheat Sheet 2026

The 30 highest-yield CBB facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. What is the broker's primary role during negotiations between buyer and seller? → To facilitate communication and help both parties reach a mutually acceptable agreement
2. When should a business broker recommend the seller obtain a legal review of the purchase agreement? → Before the seller signs any binding agreement
3. Which financial records are most critical for a buyer to review during due diligence? → Three to five years of tax returns and P&L statements
4. What is an SBA 7(a) loan most commonly used for in business acquisitions? → Funding the purchase of existing businesses, including goodwill and working capital
5. When a buyer uses a combination of bank financing and seller financing, this structure is often called a: → Layered or blended financing structure
6. What is the purpose of an earn-out clause in deal structuring? → It adjusts final payment based on business performance
7. What financial metric is most important for determining cash flow available to a buyer? → Seller’s Discretionary Earnings (SDE)
8. What is the purpose of a non-disclosure agreement (NDA) in business brokerage? → To protect business confidentiality
9. What minimum equity injection do SBA lenders typically require from a buyer in a business acquisition? → 10% of the purchase price
10. Which document is most useful when analyzing a business’s financial history? → Tax returns
11. In exit planning, a 'Quality of Earnings' (QoE) analysis is primarily used to: → Verify the accuracy and sustainability of the business's reported earnings
12. Which party typically holds funds in escrow at closing in a business sale? → A neutral third-party escrow company or attorney
13. Which factor is MOST likely to reduce a business's marketability when preparing it for sale? → The owner personally managing all key customer and supplier relationships
14. What does 'working capital' measure in business operations? → Current assets minus current liabilities, reflecting short-term operational liquidity
15. A business broker advises a client to improve EBITDA multiple before sale. Which strategy is MOST effective? → Building diversified customer relationships and securing recurring revenue contracts
16. When using a market-based valuation, what is typically compared? → Similar business sales
17. What does 'Seller's Discretionary Earnings' (SDE) measure in the context of exit planning? → The total economic benefit a single owner-operator derives from the business
18. What does 'BATNA' stand for and why is it important in deal negotiations? → Best Alternative to a Negotiated Agreement; it defines each party's walk-away position
19. Which of the following would be considered a non-recurring expense when recasting financials? → A one-time legal settlement paid during the reporting year
20. A business that generates 75% of its revenue from a single customer is said to have what issue? → Customer concentration risk
21. What does a lender mean when they require 'collateral' for a business acquisition loan? → Assets pledged by the borrower that the lender can seize if the loan is not repaid
22. Why might a seller offer financing in a business sale deal? → To make the deal more appealing and accessible
23. What is an 'allocation of purchase price' and why does it matter at closing? → The assignment of the total purchase price across different asset classes for tax purposes
24. What does 'Seller's Discretionary Earnings' (SDE) represent in a small business context? → Pre-tax earnings plus owner's compensation and non-recurring expenses added back
25. Which action is essential for building a long-term relationship with clients? → Maintaining consistent communication
26. Which buyer profile characteristic most concerns a lender evaluating a business acquisition loan? → The buyer having no relevant industry experience and no management background
27. Which of the following is typically adjusted when calculating SDE? → Owner's compensation
28. What does 'splitting the difference' mean in deal negotiations? → Both parties agreeing to meet halfway between their respective positions
29. What risk does a broker help mitigate by structuring an earnout provision? → The risk that future performance will not match historical results
30. Which regulatory body typically oversees business brokerage licensing at the state level? → State Real Estate Commission