Glossary · Reading the business
In short
This refers to the primary intention of a business to generate profit. The IRS and SBA require businesses to demonstrate a genuine profit motive to qualify for certain tax deductions and loan programs.
The SBA requires the acquired business to operate with a profit motive, meaning it can't be a hobby or a non-profit. Lenders assess the business's historical financial performance and your business plan to confirm its viability and intent to generate earnings. This is fundamental to proving the business's ability to repay the SBA loan.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
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.
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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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