Glossary · Reading the business
In short
Funds taken out of a business by its owner, typically from a sole proprietorship or partnership, for personal use. It's a key component of seller's discretionary earnings (SDE) and understanding the true owner benefit.
When analyzing a business's financials, you'll see owner draws on the Profit and Loss Statement. These are usually "added back" to calculate SDE, giving you a clearer picture of the actual cash flow available to a new owner. This figure is crucial for determining your ability to service debt.
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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