Glossary · Reading the business
In short
A lender's evaluation of the combined ability of the business and all guarantors to repay all their debts, including the new SBA loan. Buyers care because it determines if the deal is viable from a lending perspective.
This is a critical underwriting component where the lender assesses not just the target business's cash flow, but also any other personal or business debt held by you and other guarantors. The total cash flow from all sources must be sufficient to cover all existing and proposed debt payments, typically measured by DSCR.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
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.
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