{"ok":true,"canonical_url":"https://dealroom.so/glossary/burn-rate","api_url":"https://dealroom.so/api/public/glossary/burn-rate","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":"burn-rate","term":"Burn Rate","group":"Reading the business","definition":"This is the rate at which a business is spending its available cash, typically when it's operating at a loss. It tells you how long the business can survive before running out of money.","what_it_means":"For an acquisition, analyzing the target business's burn rate is critical, especially if it's not yet profitable or has high startup costs. A high burn rate indicates financial risk and requires a clear plan for achieving profitability quickly. Ensure your cash flow projections account for this.","url":"https://dealroom.so/glossary/burn-rate","official_sources":[],"related":[{"slug":"cash-flow","term":"Cash flow","url":"https://dealroom.so/glossary/cash-flow"},{"slug":"profit-and-loss-statement","term":"Profit and Loss Statement","url":"https://dealroom.so/glossary/profit-and-loss-statement"},{"slug":"financial-projections","term":"Financial projections","url":"https://dealroom.so/glossary/financial-projections"},{"slug":"working-capital","term":"Working capital","url":"https://dealroom.so/glossary/working-capital"}],"related_questions":[{"question":"What alternative base rates are available for variable-rate 7(a) loans besides the Wall Street Journal Prime rate?","url":"https://dealroom.so/for-lenders/questions/what-alternative-base-rates-are-available-for-variable-rate-7-a-loans-besides-the-wall-str"},{"question":"What is the 'Prime Rate' when talking about SBA 7(a) loan rates?","url":"https://dealroom.so/sba-loans/basics/what-is-the-prime-rate-when-talking-about-sba-7-a-loan-rates"},{"question":"What specific alternative base rates are permissible for variable rate 7(a) loans?","url":"https://dealroom.so/for-lenders/questions/what-specific-alternative-base-rates-are-permissible-for-variable-rate-7-a-loans"},{"question":"What is the Wall Street Journal Prime Rate's role in SBA 7(a) loan interest rates?","url":"https://dealroom.so/sba-loans/basics/what-is-the-wall-street-journal-prime-rate-s-role-in-sba-7-a-loan-interest-rates"},{"question":"What are the maximum allowable interest rates for variable rate 7(a) loans, including the permissible spread?","url":"https://dealroom.so/for-lenders/questions/what-are-the-maximum-allowable-interest-rates-for-variable-rate-7-a-loans-including-the-pe"},{"question":"What are the current alternative base rate options for variable rate 7(a) loans, besides Prime Rate?","url":"https://dealroom.so/for-lenders/questions/what-are-the-current-alternative-base-rate-options-for-variable-rate-7-a-loans-besides-pri"}]},"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 — Burn Rate","url":"https://dealroom.so/glossary/burn-rate","source_type":"DealRoom Data"}}