{"ok":true,"canonical_url":"https://dealroom.so/glossary/add-back","api_url":"https://dealroom.so/api/public/glossary/add-back","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"add-back","term":"Add-back","group":"Reading the business","definition":"An add-back is an expense on a company's financial statements that is non-recurring or discretionary and will not exist under new ownership. Identifying add-backs helps you see the true profit potential and cash flow of the business for a new owner.","what_it_means":"Lenders will scrutinize seller-provided add-backs during underwriting to determine the business's true SDE or EBITDA. Common add-backs include owner's salary, discretionary expenses like personal travel, or one-time legal fees. Challenge any add-back that isn't clearly justifiable as non-recurring or discretionary for your ownership.","url":"https://dealroom.so/glossary/add-back","official_sources":[],"related":[{"slug":"sde","term":"SDE","url":"https://dealroom.so/glossary/sde"},{"slug":"ebitda","term":"EBITDA","url":"https://dealroom.so/glossary/ebitda"},{"slug":"owner-earnings","term":"Owner earnings","url":"https://dealroom.so/glossary/owner-earnings"},{"slug":"financial-spreads","term":"Financial spreads","url":"https://dealroom.so/glossary/financial-spreads"}],"related_questions":[{"question":"What is the maximum interest rate spread a lender can add over the base rate for an SBA 7(a) loan?","url":"https://dealroom.so/sba-7a/questions/what-is-the-maximum-interest-rate-spread-a-lender-can-add-over-the-base-rate-for-an-sba-7-"},{"question":"Do I really have to pay back an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/do-i-really-have-to-pay-back-an-sba-7-a-loan"},{"question":"What happens if my business cannot pay back the SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/what-happens-if-my-business-cannot-pay-back-the-sba-7-a-loan"},{"question":"What is the longest time I have to pay back an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/what-is-the-longest-time-i-have-to-pay-back-an-sba-7-a-loan"},{"question":"What if the seller wants to be paid back earlier than the SBA standby period allows?","url":"https://dealroom.so/sba-7a/questions/what-if-the-seller-wants-to-be-paid-back-earlier-than-the-sba-standby-period-allows"},{"question":"Does an SBA 7(a) loan have a prepayment penalty if I pay it back early?","url":"https://dealroom.so/sba-loans/basics/does-an-sba-7-a-loan-have-a-prepayment-penalty-if-i-pay-it-back-early"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Add-back","url":"https://dealroom.so/glossary/add-back","source_type":"DealRoom Data"}}