{"ok":true,"canonical_url":"https://dealroom.so/glossary/financial-performance","api_url":"https://dealroom.so/api/public/glossary/financial-performance","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":"financial-performance","term":"Financial Performance","group":"Reading the business","definition":"This refers to how well a business is doing financially, measured by its revenue, expenses, profits, and cash flow over time. It's the core of your due diligence.","what_it_means":"Lenders analyze historical financial performance, typically for the past three years, to assess the business's ability to repay the SBA loan. You'll dig into the Profit and Loss Statements, Balance Sheets, and tax returns to verify the numbers and identify trends.","url":"https://dealroom.so/glossary/financial-performance","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":"profit-and-loss-statement","term":"Profit and Loss Statement","url":"https://dealroom.so/glossary/profit-and-loss-statement"},{"slug":"balance-sheet","term":"Balance Sheet","url":"https://dealroom.so/glossary/balance-sheet"},{"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"}],"related_questions":[{"question":"Can a significant change in the business's financial performance during due diligence kill approval?","url":"https://dealroom.so/sba-7a/questions/can-a-significant-change-in-the-business-s-financial-performance-during-due-diligence-kill"},{"question":"Are there specific financial performance requirements for a franchise to be eligible for SBA financing?","url":"https://dealroom.so/sba-7a/questions/are-there-specific-financial-performance-requirements-for-a-franchise-to-be-eligible-for-s"},{"question":"Are there specific non-financial performance requirements for a franchise to be eligible for SBA 7(a) financing?","url":"https://dealroom.so/for-lenders/questions/are-there-specific-non-financial-performance-requirements-for-a-franchise-to-be-eligible-f"},{"question":"How does a lender apply 'prudent lending standards' when evaluating a borrower's historical financial performance trends for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-apply-prudent-lending-standards-when-evaluating-a-borrower-s-historical-"},{"question":"How often does the SBA require lenders to report on 7(a) loan portfolio performance?","url":"https://dealroom.so/for-lenders/questions/how-often-does-the-sba-require-lenders-to-report-on-7-a-loan-portfolio-performance"},{"question":"How often does the SBA require lenders to report on 7(a) loan portfolio performance for secondary market purposes?","url":"https://dealroom.so/for-lenders/questions/how-often-does-the-sba-require-lenders-to-report-on-7-a-loan-portfolio-performance-for-sec"}]},"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 — Financial Performance","url":"https://dealroom.so/glossary/financial-performance","source_type":"DealRoom Data"}}