Glossary · Reading the business
In short
When a large percentage of a business's revenue relies on a small number of customers. For buyers, high customer concentration is a significant risk, as losing even one major customer can severely disrupt cash flow.
Lenders pay close attention to customer concentration because it directly impacts the business's stability and your ability to make loan payments. During due diligence, demand a customer list with a detailed revenue breakdown. If concentration is high, thoroughly investigate the strength of those customer relationships, existing contract terms, and any plans for diversification.
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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