Glossary · Reading the business
In short
These are business operating losses from prior years that can be used to offset future taxable income, reducing the business's tax burden.
While they can be a tax benefit, large carryover losses can signal past financial struggles. Understand their origin during due diligence. In an asset purchase, carryover losses typically stay with the seller, but in a stock purchase, they might transfer, which can be a tax advantage.
Defined by DealRoom.so SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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Send us the asking price and the seller's cash flow — we'll show whether the deal services SBA debt and where the add-backs are likely to hold up.
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