{"ok":true,"canonical_url":"https://dealroom.so/glossary/owner-s-salary","api_url":"https://dealroom.so/api/public/glossary/owner-s-salary","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-s-salary","term":"Owner's salary","group":"Reading the business","definition":"The compensation an owner takes from the business for their work. Buyers care because this amount needs to be adjusted when evaluating the business's true profitability for a new owner.","what_it_means":"For an SBA loan, the lender will \"add back\" the seller's owner salary when calculating Seller's Discretionary Earnings (SDE) or EBITDA. You'll need to factor in a reasonable replacement salary for yourself when projecting your post-acquisition cash flow to ensure the business can support it.","url":"https://dealroom.so/glossary/owner-s-salary","official_sources":[],"related":[{"slug":"sde","term":"SDE","url":"https://dealroom.so/glossary/sde"},{"slug":"add-backs","term":"Add-backs","url":"https://dealroom.so/glossary/add-backs"},{"slug":"owner-earnings","term":"Owner earnings","url":"https://dealroom.so/glossary/owner-earnings"},{"slug":"cash-flow-after-debt-service","term":"Cash flow after debt service","url":"https://dealroom.so/glossary/cash-flow-after-debt-service"}],"related_questions":[{"question":"Can working capital from an SBA loan be used to pay myself a salary immediately after closing?","url":"https://dealroom.so/sba-7a/questions/can-working-capital-from-an-sba-loan-be-used-to-pay-myself-a-salary-immediately-after-clos"},{"question":"Can an SBA 7(a) loan be used to pay myself a salary immediately after closing the acquisition?","url":"https://dealroom.so/for-lenders/questions/can-an-sba-7-a-loan-be-used-to-pay-myself-a-salary-immediately-after-closing-the-acquisiti"},{"question":"Can I use an SBA 7(a) loan to pay myself a salary immediately after closing the acquisition?","url":"https://dealroom.so/sba-7a/questions/can-i-use-an-sba-7-a-loan-to-pay-myself-a-salary-immediately-after-closing-the-acquisition"},{"question":"How does a lender confirm an owner's U.S. citizenship if they were born in a U.S. territory or abroad to U.S. parents?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-confirm-an-owner-s-u-s-citizenship-if-they-were-born-in-a-u-s-territory-"},{"question":"How does the SBA verify a non-owner investor's funds used for equity injection?","url":"https://dealroom.so/sba-7a/questions/how-does-the-sba-verify-a-non-owner-investor-s-funds-used-for-equity-injection"},{"question":"Can a business owner's personal assets be used as collateral if business assets are limited?","url":"https://dealroom.so/sba-loans/basics/can-a-business-owner-s-personal-assets-be-used-as-collateral-if-business-assets-are-limite"}]},"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's salary","url":"https://dealroom.so/glossary/owner-s-salary","source_type":"DealRoom Data"}}