{"ok":true,"canonical_url":"https://dealroom.so/glossary/net-operating-income","api_url":"https://dealroom.so/api/public/glossary/net-operating-income","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":"net-operating-income","term":"Net Operating Income","aka":"NOI","group":"Reading the business","definition":"A measure of a business's profitability before taxes and interest, often used for real estate. For general businesses, buyers typically focus on SDE or EBITDA for valuation.","what_it_means":"While NOI is common in real estate, for a general business acquisition, you'll primarily look at Seller's Discretionary Earnings (SDE) or EBITDA. NOI helps assess the operational profitability of any real estate included in the deal, separating property performance from overall business performance. Understand which metric the seller is using.","url":"https://dealroom.so/glossary/net-operating-income","official_sources":[],"related":[{"slug":"ebitda","term":"EBITDA","url":"https://dealroom.so/glossary/ebitda"},{"slug":"sde","term":"SDE","url":"https://dealroom.so/glossary/sde"},{"slug":"owner-earnings","term":"Owner earnings","url":"https://dealroom.so/glossary/owner-earnings"},{"slug":"add-backs","term":"Add-backs","url":"https://dealroom.so/glossary/add-backs"}],"related_questions":[{"question":"What is the specific personal net worth threshold that triggers a personal guaranty requirement for an owner?","url":"https://dealroom.so/sba-7a/questions/what-is-the-specific-personal-net-worth-threshold-that-triggers-a-personal-guaranty-requir"},{"question":"Can I use an SBA 7(a) loan to purchase a business with a negative net worth?","url":"https://dealroom.so/sba-7a/questions/can-i-use-an-sba-7-a-loan-to-purchase-a-business-with-a-negative-net-worth"},{"question":"Can an SBA 7(a) loan be used to purchase a business with a negative net worth?","url":"https://dealroom.so/sba-loans/basics/can-an-sba-7-a-loan-be-used-to-purchase-a-business-with-a-negative-net-worth"},{"question":"What if the acquired business primarily generates revenue from passive rental income?","url":"https://dealroom.so/sba-7a/questions/what-if-the-acquired-business-primarily-generates-revenue-from-passive-rental-income"},{"question":"What constitutes \"passive income\" disqualifying a business from 7(a) loan eligibility?","url":"https://dealroom.so/for-lenders/questions/what-constitutes-passive-income-disqualifying-a-business-from-7-a-loan-eligibility"},{"question":"Can an SBA 7(a) loan be used to purchase a business with a negative tangible net worth?","url":"https://dealroom.so/sba-7a/questions/can-an-sba-7-a-loan-be-used-to-purchase-a-business-with-a-negative-tangible-net-worth"}]},"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 — Net Operating Income","url":"https://dealroom.so/glossary/net-operating-income","source_type":"DealRoom Data"}}