Glossary · Reading the business
In short
A fine imposed by a taxing authority for non-compliance, such as late filing or underpayment of taxes. Recurring penalties can signal poor financial management or potential hidden liabilities within the business.
When reviewing the seller's financial records, look for any pattern of tax penalties. These indicate systemic issues that could become your problem after acquisition. Demand explanations and ensure the seller resolves all outstanding penalties before closing, as they represent a direct drain on the business's cash flow.
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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