{"ok":true,"canonical_url":"https://dealroom.so/glossary/historical-earnings","api_url":"https://dealroom.so/api/public/glossary/historical-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":"historical-earnings","term":"Historical Earnings","group":"Reading the business","definition":"The past financial performance of the business, usually measured over several years. This data is critical for assessing the business's stability and cash flow before you buy it.","what_it_means":"Lenders analyze 3-5 years of historical earnings, primarily using tax returns and profit & loss statements, to understand the business's ability to repay the loan. Focus on consistent profitability and identify any significant one-time events or trends that might impact future performance. These figures form the basis for your future projections and cash flow analysis.","url":"https://dealroom.so/glossary/historical-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":"profit-and-loss-statement","term":"Profit and Loss Statement","url":"https://dealroom.so/glossary/profit-and-loss-statement"},{"slug":"tax-return","term":"Tax return","url":"https://dealroom.so/glossary/tax-return"},{"slug":"sde","term":"SDE","url":"https://dealroom.so/glossary/sde"},{"slug":"ebitda","term":"EBITDA","url":"https://dealroom.so/glossary/ebitda"}],"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"},{"question":"How does the SBA evaluate the financial strength of a business with inconsistent historical profitability for an acquisition loan?","url":"https://dealroom.so/sba-7a/questions/how-does-the-sba-evaluate-the-financial-strength-of-a-business-with-inconsistent-historica"},{"question":"Can I get an SBA 7(a) loan if the business I'm buying has poor historical cash flow?","url":"https://dealroom.so/sba-7a/questions/can-i-get-an-sba-7-a-loan-if-the-business-i-m-buying-has-poor-historical-cash-flow"},{"question":"What if the business I'm acquiring has poor historical cash flow or declining revenues for the last two years?","url":"https://dealroom.so/sba-7a/questions/what-if-the-business-i-m-acquiring-has-poor-historical-cash-flow-or-declining-revenues-for"},{"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-"}]},"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 — Historical Earnings","url":"https://dealroom.so/glossary/historical-earnings","source_type":"DealRoom Data"}}