Glossary · Reading the business
In short
Net income, or profit, is what's left after all expenses, including taxes, are deducted from revenue. It's the bottom line on the Profit and Loss Statement and shows the business's actual profitability.
While net income is important, for an acquisition, lenders often focus more on SDE or EBITDA, which "add back" certain expenses to show the cash flow available to a new owner. High net income is good, but understand how it translates to cash available for debt service after adjustments. Don't confuse net income with cash flow.
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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