Glossary · Reading the business
In short
This occurs when a large portion of a business's revenue comes from a small number of customers or a single product/service. It's a risk because losing one major client can severely impact cash flow.
During due diligence, identify any revenue concentration. If 20% or more of revenue comes from one customer, the lender will scrutinize this risk. Develop a plan to diversify revenue post-acquisition, and be prepared to explain how you'll mitigate this vulnerability to your lender.
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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