{"ok":true,"canonical_url":"https://dealroom.so/glossary/net-profit","api_url":"https://dealroom.so/api/public/glossary/net-profit","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-profit","term":"Net profit","group":"Reading the business","definition":"This is what's left of a business's revenue after all expenses, including taxes, are paid. It's a key indicator of a business's true profitability and financial health for a buyer.","what_it_means":"When evaluating a business, net profit is a core metric. However, for an SBA loan, lenders often focus on SDE or EBITDA, which adjust for owner compensation and non-cash expenses, providing a clearer picture of the business's cash flow available for debt service. Always look beyond stated net profit.","url":"https://dealroom.so/glossary/net-profit","official_sources":[],"related":[{"slug":"sde","term":"SDE","url":"https://dealroom.so/glossary/sde"},{"slug":"ebitda","term":"EBITDA","url":"https://dealroom.so/glossary/ebitda"},{"slug":"profit-and-loss-statement","term":"Profit and Loss Statement","url":"https://dealroom.so/glossary/profit-and-loss-statement"},{"slug":"cash-flow","term":"Cash flow","url":"https://dealroom.so/glossary/cash-flow"}],"related_questions":[{"question":"Can a non-profit organization with a for-profit subsidiary be eligible for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/can-a-non-profit-organization-with-a-for-profit-subsidiary-be-eligible-for-a-7-a-loan"},{"question":"Can a non-profit organization receive an SBA 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/can-a-non-profit-organization-receive-an-sba-7-a-loan"},{"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":"Does my business need to be a for-profit company to qualify?","url":"https://dealroom.so/sba-loans/basics/does-my-business-need-to-be-a-for-profit-company-to-qualify"}]},"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 profit","url":"https://dealroom.so/glossary/net-profit","source_type":"DealRoom Data"}}