{"ok":true,"canonical_url":"https://dealroom.so/glossary/multiple","api_url":"https://dealroom.so/api/public/glossary/multiple","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":"multiple","term":"Multiple","group":"Reading the business","definition":"Price divided by earnings. A business earning $500K listed at 3x costs $1.5M. Multiples let you compare deals of different sizes.","what_it_means":"The multiple is the language of business valuation — it compresses a deal's pricing into a single ratio that lets you compare deals of different sizes and industries. Multiples vary dramatically: a high-margin professional-services firm might trade at 4–6x SDE while a single-location restaurant might sell at 1.5–2.5x. When a seller quotes a multiple, ask what the earnings number is and whether it's based on the most recent year, a three-year average, or a projection.","url":"https://dealroom.so/glossary/multiple","official_sources":[],"related":[{"slug":"ebitda","term":"EBITDA","url":"https://dealroom.so/glossary/ebitda"},{"slug":"sde","term":"SDE","url":"https://dealroom.so/glossary/sde"},{"slug":"business-valuation","term":"Business valuation","url":"https://dealroom.so/glossary/business-valuation"},{"slug":"goodwill","term":"Goodwill","url":"https://dealroom.so/glossary/goodwill"}],"related_questions":[{"question":"What if the business assets are located in multiple states, requiring multiple UCC filings?","url":"https://dealroom.so/for-lenders/questions/what-if-the-business-assets-are-located-in-multiple-states-requiring-multiple-ucc-filings"},{"question":"How is life insurance structured when a business has multiple key owners?","url":"https://dealroom.so/sba-7a/questions/how-is-life-insurance-structured-when-a-business-has-multiple-key-owners"},{"question":"What if the business I'm acquiring operates across multiple distinct industries?","url":"https://dealroom.so/sba-7a/questions/what-if-the-business-i-m-acquiring-operates-across-multiple-distinct-industries"},{"question":"How does common management between multiple businesses trigger affiliation for SBA size purposes?","url":"https://dealroom.so/sba-7a/questions/how-does-common-management-between-multiple-businesses-trigger-affiliation-for-sba-size-pu"},{"question":"What if my business has multiple locations; can all of them be covered?","url":"https://dealroom.so/sba-loans/basics/what-if-my-business-has-multiple-locations-can-all-of-them-be-covered"},{"question":"If my acquiring business has multiple owners, how is the personal guaranty requirement applied?","url":"https://dealroom.so/sba-7a/questions/if-my-acquiring-business-has-multiple-owners-how-is-the-personal-guaranty-requirement-appl"}]},"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 — Multiple","url":"https://dealroom.so/glossary/multiple","source_type":"DealRoom Data"}}