{"ok":true,"canonical_url":"https://dealroom.so/glossary/owner-compensation","api_url":"https://dealroom.so/api/public/glossary/owner-compensation","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":"owner-compensation","term":"Owner Compensation","group":"Reading the business","definition":"This is the salary, perks, and benefits the current owner takes from the business. It's a critical component in calculating the true earnings available to a new owner.","what_it_means":"When analyzing a business, you'll often see owner compensation added back to adjust for a new owner's salary. This adjustment helps determine the Seller's Discretionary Earnings (SDE), which is a common metric for valuing small businesses. Understand what's included to assess your potential income.","url":"https://dealroom.so/glossary/owner-compensation","official_sources":[],"related":[{"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"},{"slug":"ebitda","term":"EBITDA","url":"https://dealroom.so/glossary/ebitda"}],"related_questions":[{"question":"Can the seller receive any form of compensation from the acquired business during the standby period of their seller note?","url":"https://dealroom.so/sba-7a/questions/can-the-seller-receive-any-form-of-compensation-from-the-acquired-business-during-the-stan"},{"question":"Are non-owner spouses always required to personally guarantee SBA loans?","url":"https://dealroom.so/sba-7a/questions/are-non-owner-spouses-always-required-to-personally-guarantee-sba-loans"},{"question":"How does the SBA guarantee primarily benefit me as the business owner?","url":"https://dealroom.so/sba-loans/basics/how-does-the-sba-guarantee-primarily-benefit-me-as-the-business-owner"},{"question":"Are there any specific training or experience requirements for the business owner?","url":"https://dealroom.so/sba-loans/basics/are-there-any-specific-training-or-experience-requirements-for-the-business-owner"},{"question":"What does a 'personal guaranty' mean for me as a business owner?","url":"https://dealroom.so/sba-loans/basics/what-does-a-personal-guaranty-mean-for-me-as-a-business-owner"},{"question":"How is prior owner debt converted to equity treated for injection purposes?","url":"https://dealroom.so/for-lenders/questions/how-is-prior-owner-debt-converted-to-equity-treated-for-injection-purposes"}]},"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 — Owner Compensation","url":"https://dealroom.so/glossary/owner-compensation","source_type":"DealRoom Data"}}