{"ok":true,"canonical_url":"https://dealroom.so/glossary/financial-spreads","api_url":"https://dealroom.so/api/public/glossary/financial-spreads","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-spreads","term":"Financial spreads","group":"Reading the business","definition":"Financial spreads are a detailed breakdown and analysis of a business's financial statements over several years, often standardized by lenders. They help you and your lender understand the company's historical performance, trends, and financial health.","what_it_means":"When buying a business with a 7(a) loan, your lender will \"spread\" the seller's financial statements (P&Ls, Balance Sheets) to identify normalizations and calculate key ratios like DSCR. This process helps confirm the business's ability to service the new debt. Review these spreads carefully with your advisor to ensure they reflect the true financial picture.","url":"https://dealroom.so/glossary/financial-spreads","official_sources":[],"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":"dscr","term":"DSCR","url":"https://dealroom.so/glossary/dscr"},{"slug":"underwriting","term":"Underwriting","url":"https://dealroom.so/glossary/underwriting"}],"related_questions":[{"question":"What if my personal financial statement shows low liquid assets?","url":"https://dealroom.so/sba-loans/basics/what-if-my-personal-financial-statement-shows-low-liquid-assets"},{"question":"Are SBA 7(a) loans exclusively for businesses with financial difficulties?","url":"https://dealroom.so/sba-loans/basics/are-sba-7-a-loans-exclusively-for-businesses-with-financial-difficulties"},{"question":"What if my business is new and has no financial history?","url":"https://dealroom.so/sba-loans/basics/what-if-my-business-is-new-and-has-no-financial-history"},{"question":"Does misrepresenting financial information on the SBA application automatically kill approval?","url":"https://dealroom.so/sba-7a/questions/does-misrepresenting-financial-information-on-the-sba-application-automatically-kill-appro"},{"question":"How does my personal financial history affect SBA 7(a) loan approval?","url":"https://dealroom.so/sba-7a/questions/how-does-my-personal-financial-history-affect-sba-7-a-loan-approval"},{"question":"What specific financial documentation will I need to provide for my personal finances?","url":"https://dealroom.so/sba-7a/questions/what-specific-financial-documentation-will-i-need-to-provide-for-my-personal-finances"}]},"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 spreads","url":"https://dealroom.so/glossary/financial-spreads","source_type":"DealRoom Data"}}