{"ok":true,"canonical_url":"https://dealroom.so/glossary/economic-dependence","api_url":"https://dealroom.so/api/public/glossary/economic-dependence","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":"economic-dependence","term":"Economic Dependence","group":"Reading the business","definition":"This describes a situation where a business relies heavily on a single customer, supplier, or contract for a disproportionate amount of its revenue or operations. It's a major risk factor for any buyer.","what_it_means":"Lenders will scrutinize Economic Dependence because it indicates significant risk if that relationship changes. During due diligence, identify if more than 20-30% of revenue comes from one client. You'll need a strong plan to diversify or mitigate this risk, as it can make a business difficult to finance or even ineligible.","url":"https://dealroom.so/glossary/economic-dependence","official_sources":[],"related":[{"slug":"industry-risk","term":"Industry Risk","url":"https://dealroom.so/glossary/industry-risk"},{"slug":"due-diligence","term":"Due diligence","url":"https://dealroom.so/glossary/due-diligence"},{"slug":"business-plan","term":"Business plan","url":"https://dealroom.so/glossary/business-plan"},{"slug":"cash-flow","term":"Cash flow","url":"https://dealroom.so/glossary/cash-flow"}],"related_questions":[{"question":"How does a lender determine affiliation for size purposes when evaluating common economic dependence?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-determine-affiliation-for-size-purposes-when-evaluating-common-economic-"},{"question":"Can I use a conditional grant from a local economic development agency as equity?","url":"https://dealroom.so/sba-7a/questions/can-i-use-a-conditional-grant-from-a-local-economic-development-agency-as-equity"},{"question":"Under what conditions does a shared economic interest trigger affiliation for SBA size standard purposes?","url":"https://dealroom.so/for-lenders/questions/under-what-conditions-does-a-shared-economic-interest-trigger-affiliation-for-sba-size-sta"}]},"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 — Economic Dependence","url":"https://dealroom.so/glossary/economic-dependence","source_type":"DealRoom Data"}}