Glossary · Reading the business
In short
In a multi-level marketing (MLM) or direct sales business, your downline refers to the network of distributors you've recruited and their subsequent recruits. You earn commissions on their sales.
If you're considering a business with an MLM component, the strength and activity of the downline are crucial for revenue generation. However, be wary: a business heavily reliant on downline recruitment rather than genuine product sales may be considered a pyramidal distribution system, which is ineligible for SBA financing. Understand how commissions are structured.
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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