{"ok":true,"canonical_url":"https://dealroom.so/glossary/leverage","api_url":"https://dealroom.so/api/public/glossary/leverage","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":"leverage","term":"Leverage","group":"Reading the business","definition":"Using borrowed money (debt) to finance an investment, aiming to magnify the potential returns on your equity. Buyers care because an SBA loan is a form of leverage, allowing you to acquire a larger business than you could with just your personal cash.","what_it_means":"In an SBA acquisition, leverage is primarily seen through the debt-to-equity ratio of the deal. Lenders assess your overall leverage and the business's ability to service the debt (DSCR) without excessive risk. Understand that while leverage can boost returns, it also increases financial risk if the business underperforms.","url":"https://dealroom.so/glossary/leverage","official_sources":[],"related":[{"slug":"dscr","term":"DSCR","url":"https://dealroom.so/glossary/dscr"},{"slug":"equity-injection","term":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"},{"slug":"debt-service","term":"Debt service","url":"https://dealroom.so/glossary/debt-service"},{"slug":"overall-leverage","term":"Overall Leverage","url":"https://dealroom.so/glossary/overall-leverage"}],"related_questions":[]},"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 — Leverage","url":"https://dealroom.so/glossary/leverage","source_type":"DealRoom Data"}}