{"ok":true,"canonical_url":"https://dealroom.so/glossary/earnings","api_url":"https://dealroom.so/api/public/glossary/earnings","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":"earnings","term":"Earnings","group":"Reading the business","definition":"Earnings represent the profit a business generates, which is fundamental to its valuation and its ability to repay debt. As a buyer, you care because this is the core metric for assessing the business's financial health and future prospects.","what_it_means":"Lenders and buyers focus on key earnings metrics like Seller's Discretionary Earnings (SDE) or Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) to evaluate the business's true cash flow and repayment capacity. These figures are often adjusted with add-backs to reflect the operational reality for a new owner.","url":"https://dealroom.so/glossary/earnings","official_sources":[{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"}],"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":"add-backs","term":"Add-backs","url":"https://dealroom.so/glossary/add-backs"}],"related_questions":[{"question":"Can a business's retained earnings count as equity injection?","url":"https://dealroom.so/sba-loans/basics/can-a-business-s-retained-earnings-count-as-equity-injection"},{"question":"Can I use my business's retained earnings from a prior venture as equity injection?","url":"https://dealroom.so/sba-7a/questions/can-i-use-my-business-s-retained-earnings-from-a-prior-venture-as-equity-injection"}]},"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 — Earnings","url":"https://dealroom.so/glossary/earnings","source_type":"DealRoom Data"}}