{"ok":true,"canonical_url":"https://dealroom.so/glossary/personal-expense","api_url":"https://dealroom.so/api/public/glossary/personal-expense","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":"personal-expense","term":"Personal Expense","group":"Reading the business","definition":"Business funds used by the owner for personal benefit, often hidden within company financials. Identifying and \"adding back\" these expenses is key to seeing the true profitability available to a new owner.","what_it_means":"Sellers often run personal expenses through their business to reduce taxable income. You must meticulously review bank statements and general ledgers to identify these. Properly adding them back increases the adjusted net income, which directly impacts the valuation and your ability to qualify for an SBA loan.","url":"https://dealroom.so/glossary/personal-expense","official_sources":[],"related":[{"slug":"add-backs","term":"Add-backs","url":"https://dealroom.so/glossary/add-backs"},{"slug":"sde","term":"SDE","url":"https://dealroom.so/glossary/sde"},{"slug":"tax-return","term":"Tax return","url":"https://dealroom.so/glossary/tax-return"},{"slug":"personal-financial-statement","term":"Personal financial statement","url":"https://dealroom.so/glossary/personal-financial-statement"}],"related_questions":[{"question":"How does business overhead expense insurance differ from key-person life insurance?","url":"https://dealroom.so/sba-7a/questions/how-does-business-overhead-expense-insurance-differ-from-key-person-life-insurance"},{"question":"Can I use SBA 7(a) loan funds for personal expenses?","url":"https://dealroom.so/sba-loans/basics/can-i-use-sba-7-a-loan-funds-for-personal-expenses"},{"question":"Am I allowed to use SBA 7(a) loan funds to pay my personal expenses?","url":"https://dealroom.so/sba-loans/basics/am-i-allowed-to-use-sba-7-a-loan-funds-to-pay-my-personal-expenses"},{"question":"Can I use the $50,000 working capital portion of my SBA loan to cover my personal living expenses for six months?","url":"https://dealroom.so/sba-7a/questions/can-i-use-the-50-000-working-capital-portion-of-my-sba-loan-to-cover-my-personal-living-ex"},{"question":"Does a personal guaranty extend to my personal assets acquired after the loan closing date?","url":"https://dealroom.so/sba-7a/questions/does-a-personal-guaranty-extend-to-my-personal-assets-acquired-after-the-loan-closing-date"},{"question":"What happens if a required personal guarantor lacks sufficient personal assets for an effective guaranty?","url":"https://dealroom.so/sba-7a/questions/what-happens-if-a-required-personal-guarantor-lacks-sufficient-personal-assets-for-an-effe"}]},"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 — Personal Expense","url":"https://dealroom.so/glossary/personal-expense","source_type":"DealRoom Data"}}