Glossary · Reading the business
In short
This is the typical compensation paid for a specific job in a particular market, reflecting what a similar position would earn.
When underwriting an acquisition, lenders will "normalize" owner compensation to a fair market wage if the current owner's salary is unusually low or high. This adjustment impacts the SDE and EBITDA, which directly affects the business valuation and your repayment capacity.
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.
Free · No documents · Usually same-day