{"ok":true,"canonical_url":"https://dealroom.so/glossary/revenue-concentration","api_url":"https://dealroom.so/api/public/glossary/revenue-concentration","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":"revenue-concentration","term":"Revenue concentration","group":"Reading the business","definition":"This occurs when a large portion of a business's revenue comes from a small number of customers or a single product/service. It's a risk because losing one major client can severely impact cash flow.","what_it_means":"During due diligence, identify any revenue concentration. If 20% or more of revenue comes from one customer, the lender will scrutinize this risk. Develop a plan to diversify revenue post-acquisition, and be prepared to explain how you'll mitigate this vulnerability to your lender.","url":"https://dealroom.so/glossary/revenue-concentration","official_sources":[{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"}],"related":[{"slug":"cash-flow","term":"Cash flow","url":"https://dealroom.so/glossary/cash-flow"},{"slug":"business-plan","term":"Business plan","url":"https://dealroom.so/glossary/business-plan"},{"slug":"due-diligence","term":"Due diligence","url":"https://dealroom.so/glossary/due-diligence"},{"slug":"government-contracts","term":"Government contracts","url":"https://dealroom.so/glossary/government-contracts"}],"related_questions":[{"question":"What if the business I'm acquiring has a high customer concentration, with one client representing 50% of revenue?","url":"https://dealroom.so/sba-loans/basics/what-if-the-business-i-m-acquiring-has-a-high-customer-concentration-with-one-client-repre"},{"question":"What if the business I am buying has a high customer concentration, with one client representing 50% of revenue?","url":"https://dealroom.so/sba-7a/questions/what-if-the-business-i-am-buying-has-a-high-customer-concentration-with-one-client-represe"},{"question":"Can a high customer concentration (e.g., one customer is 50% of revenue) jeopardize my SBA 7(a) loan approval?","url":"https://dealroom.so/sba-7a/questions/can-a-high-customer-concentration-e-g-one-customer-is-50-of-revenue-jeopardize-my-sba-7-a-"},{"question":"How does high customer concentration in a target business affect SBA 7(a) acquisition loan approval?","url":"https://dealroom.so/sba-7a/questions/how-does-high-customer-concentration-in-a-target-business-affect-sba-7-a-acquisition-loan-"},{"question":"What specific factors should a lender assess when underwriting a business with a high customer concentration?","url":"https://dealroom.so/for-lenders/questions/what-specific-factors-should-a-lender-assess-when-underwriting-a-business-with-a-high-cust"},{"question":"Can an SBA 7(a) loan be used to purchase a business with a high customer concentration?","url":"https://dealroom.so/sba-loans/basics/can-an-sba-7-a-loan-be-used-to-purchase-a-business-with-a-high-customer-concentration"}]},"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 — Revenue concentration","url":"https://dealroom.so/glossary/revenue-concentration","source_type":"DealRoom Data"}}