{"ok":true,"canonical_url":"https://dealroom.so/glossary/concentrated-risk","api_url":"https://dealroom.so/api/public/glossary/concentrated-risk","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":"concentrated-risk","term":"Concentrated risk","group":"Reading the business","definition":"A business has concentrated risk if too much revenue comes from a few customers, suppliers, or products. This makes the business vulnerable if those relationships change.","what_it_means":"Lenders look for customer concentration, typically over 10-20% from a single client. If a large portion of the business depends on one or two clients, your due diligence needs to confirm those relationships are stable and diversified. Mitigate this by securing long-term contracts or diversifying the customer base post-acquisition.","url":"https://dealroom.so/glossary/concentrated-risk","official_sources":[],"related":[{"slug":"due-diligence","term":"Due diligence","url":"https://dealroom.so/glossary/due-diligence"},{"slug":"business-valuation","term":"Business valuation","url":"https://dealroom.so/glossary/business-valuation"},{"slug":"cash-flow","term":"Cash flow","url":"https://dealroom.so/glossary/cash-flow"}],"related_questions":[{"question":"What if a significant portion of the business's historical revenue came from a single, concentrated customer that will not transfer to the new owner?","url":"https://dealroom.so/for-lenders/questions/what-if-a-significant-portion-of-the-business-s-historical-revenue-came-from-a-single-conc"},{"question":"If a business acquisition includes real estate with known environmental risks, can it still be financed?","url":"https://dealroom.so/sba-7a/questions/if-a-business-acquisition-includes-real-estate-with-known-environmental-risks-can-it-still"},{"question":"What personal risks do I take with a personal guaranty on an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/what-personal-risks-do-i-take-with-a-personal-guaranty-on-an-sba-7-a-loan"},{"question":"What are the risks for a lender holding the unguaranteed portion of an SBA 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/what-are-the-risks-for-a-lender-holding-the-unguaranteed-portion-of-an-sba-7-a-loan"},{"question":"What specific underwriting failures or omissions by a lender are categorized as 'material non-compliance' by the SBA, risking 7(a) guaranty repair or denial?","url":"https://dealroom.so/for-lenders/questions/what-specific-underwriting-failures-or-omissions-by-a-lender-are-categorized-as-material-n"}]},"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 — Concentrated risk","url":"https://dealroom.so/glossary/concentrated-risk","source_type":"DealRoom Data"}}