{"ok":true,"canonical_url":"https://dealroom.so/glossary/disposable-income","api_url":"https://dealroom.so/api/public/glossary/disposable-income","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":"disposable-income","term":"Disposable income","group":"Reading the business","definition":"This is the income left over after paying all essential expenses and taxes. For a small business owner relying on the business for salary, it's about how much the business can actually pay you.","what_it_means":"Lenders often look at the owner's personal disposable income, or lack thereof, when evaluating a borrower's ability to withstand minor business fluctuations. If your personal finances are tight, it signals higher risk. Ensure your personal financial statement (PFS) reflects a healthy cushion, or explain how the business's cash flow after debt service will cover your needs.","url":"https://dealroom.so/glossary/disposable-income","official_sources":[],"related":[{"slug":"personal-financial-statement","term":"Personal financial statement","url":"https://dealroom.so/glossary/personal-financial-statement"},{"slug":"cash-flow-after-debt-service","term":"Cash flow after debt service","url":"https://dealroom.so/glossary/cash-flow-after-debt-service"},{"slug":"repayment-capacity","term":"Repayment capacity","url":"https://dealroom.so/glossary/repayment-capacity"},{"slug":"sde","term":"SDE","url":"https://dealroom.so/glossary/sde"}],"related_questions":[{"question":"What if the acquired business primarily generates revenue from passive rental income?","url":"https://dealroom.so/sba-7a/questions/what-if-the-acquired-business-primarily-generates-revenue-from-passive-rental-income"},{"question":"What constitutes \"passive income\" disqualifying a business from 7(a) loan eligibility?","url":"https://dealroom.so/for-lenders/questions/what-constitutes-passive-income-disqualifying-a-business-from-7-a-loan-eligibility"},{"question":"What if my personal tax returns show inconsistent income or losses from other ventures?","url":"https://dealroom.so/sba-7a/questions/what-if-my-personal-tax-returns-show-inconsistent-income-or-losses-from-other-ventures"},{"question":"Do businesses that primarily generate passive income qualify for an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/do-businesses-that-primarily-generate-passive-income-qualify-for-an-sba-7-a-loan"},{"question":"Is there an income limit for my business to be \"small\" by SBA rules?","url":"https://dealroom.so/sba-loans/basics/is-there-an-income-limit-for-my-business-to-be-small-by-sba-rules"},{"question":"What if the business I'm buying has existing deferred revenue or unearned income?","url":"https://dealroom.so/sba-7a/questions/what-if-the-business-i-m-buying-has-existing-deferred-revenue-or-unearned-income"}]},"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 — Disposable income","url":"https://dealroom.so/glossary/disposable-income","source_type":"DealRoom Data"}}