Glossary · Reading the business
In short
This is how the total purchase price of a business is legally assigned to its various assets (e.g., equipment, inventory, goodwill) for tax purposes. It impacts future depreciation and tax liabilities for you.
Your attorney and accountant will help you negotiate and structure the PPA with the seller. This allocation determines how much you can depreciate over time, impacting your future tax deductions. Goodwill is often a large component in small business acquisitions, but other assets like equipment or inventory have different depreciation schedules. Get this right; it's significant.
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