Glossary · Reading the business
In short
This is money a business has already received for goods or services it hasn't yet delivered. It's a liability, not earned income, which means the business owes that value to customers in the future.
When buying a business, you inherit these obligations. You need to understand the amount of deferred revenue and factor in the future cost of delivering those services or products, as it impacts the working capital required post-acquisition.
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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