Glossary · Reading the business
In short
A multiplier used in financial modeling to calculate the present value of future cash flows, reflecting the time value of money and the risk involved.
When evaluating a business, a discount factor helps you understand what future earnings are worth today. It's a key component in discounted cash flow (DCF) valuations. A higher discount factor implies greater risk or a higher required rate of return, reducing the present value of those future earnings.
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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