Glossary · Reading the business
In short
This financial ratio compares a company's total liabilities to its shareholder equity. It indicates how much debt a business uses to finance its assets relative to the value provided by owners.
Lenders use the debt-to-equity ratio to assess a business's financial leverage and risk. A high ratio might indicate overleverage, making it harder to get an SBA loan. For an acquisition, they'll calculate this ratio for the pro forma business, including the new SBA loan and your equity injection, to ensure it meets prudent lending standards.
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
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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