{"ok":true,"canonical_url":"https://dealroom.so/glossary/customer-retention","api_url":"https://dealroom.so/api/public/glossary/customer-retention","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":"customer-retention","term":"Customer Retention","group":"Reading the business","definition":"The ability of a business to keep its existing customers over time. High retention rates indicate a stable customer base, which is a strong sign of business health and future cash flow.","what_it_means":"When evaluating a business, analyze its customer retention rate. High retention means predictable revenue, crucial for debt service. Look at customer concentration – if a few customers make up most of the revenue, losing one is a major risk. Due diligence should include reviewing customer lists and historical sales data.","url":"https://dealroom.so/glossary/customer-retention","official_sources":[],"related":[{"slug":"cash-flow","term":"Cash flow","url":"https://dealroom.so/glossary/cash-flow"},{"slug":"due-diligence","term":"Due diligence","url":"https://dealroom.so/glossary/due-diligence"},{"slug":"market-analysis","term":"Market analysis","url":"https://dealroom.so/glossary/market-analysis"},{"slug":"financial-projections","term":"Financial projections","url":"https://dealroom.so/glossary/financial-projections"}],"related_questions":[{"question":"Can a high customer concentration (e.g., one customer is 50% of revenue) jeopardize my SBA 7(a) loan approval?","url":"https://dealroom.so/sba-7a/questions/can-a-high-customer-concentration-e-g-one-customer-is-50-of-revenue-jeopardize-my-sba-7-a-"},{"question":"What if the business I'm acquiring relies heavily on a single major customer?","url":"https://dealroom.so/sba-7a/questions/what-if-the-business-i-m-acquiring-relies-heavily-on-a-single-major-customer"},{"question":"How does the SBA typically value intangible assets like customer lists or software for collateral?","url":"https://dealroom.so/sba-7a/questions/how-does-the-sba-typically-value-intangible-assets-like-customer-lists-or-software-for-col"},{"question":"How does high customer concentration in a target business affect SBA 7(a) acquisition loan approval?","url":"https://dealroom.so/sba-7a/questions/how-does-high-customer-concentration-in-a-target-business-affect-sba-7-a-acquisition-loan-"},{"question":"What specific factors should a lender assess when underwriting a business with a high customer concentration?","url":"https://dealroom.so/for-lenders/questions/what-specific-factors-should-a-lender-assess-when-underwriting-a-business-with-a-high-cust"},{"question":"Can an SBA 7(a) loan be used to purchase a business with a high customer concentration?","url":"https://dealroom.so/sba-loans/basics/can-an-sba-7-a-loan-be-used-to-purchase-a-business-with-a-high-customer-concentration"}]},"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 — Customer Retention","url":"https://dealroom.so/glossary/customer-retention","source_type":"DealRoom Data"}}