Glossary · Reading the business
In short
EBITDA plus the owner's salary and perks. For small businesses, this is the truest picture of what the business pays its owner.
SDE is the metric most commonly used for small businesses (typically under $2M in earnings) because the owner is usually also the operator. By adding back the owner's salary on top of EBITDA, you get a view of the total economic benefit to whoever is running the company. Lenders look at SDE when sizing the DSCR for small deals, because it tells them whether the business generates enough to both service the debt and pay you a living wage.
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 2026-06-14 · 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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