Glossary · Reading the business
In short
These are documents issued by a seller to a buyer, reducing the amount the buyer owes, often for returns, allowances, or billing errors. They impact revenue reporting.
Review credit memos during Due diligence to understand the frequency and reasons for customer adjustments. High volumes could indicate product quality issues, customer service problems, or aggressive revenue recognition practices that inflate the seller's reported income on the Profit and Loss Statement. Dig into the Audit trail.
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.
Pressure-test the numbers before you make an offer
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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