Glossary · Reading the business
In short
These are non-essential business costs that an owner chooses to incur, often for personal benefit, which can be eliminated or reduced without harming operations.
Identifying and "adding back" discretionary expenses is crucial for calculating a business's true owner benefit or Adjusted EBITDA. Your CPA will help you scrutinize expenses like excessive travel, personal vehicles, or non-business related salaries to adjust the profit for a buyer.
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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