{"ok":true,"canonical_url":"https://www.capbench.com/glossary/expense","api_url":"https://www.capbench.com/api/public/glossary/expense","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-17","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","CapBench lender and franchise enrichment"],"term":{"slug":"expense","term":"Expense","group":"Reading the business","definition":"The costs incurred in running a business to generate revenue, such as rent, utilities, and salaries. Buyers care because expenses directly reduce profit and impact the business's overall financial health.","what_it_means":"Scrutinize every line item on the P&L to understand the business's expense structure. Differentiate between fixed and variable expenses. Look for discretionary expenses or owner-related costs that can be added back to calculate SDE. High or unusual expenses warrant further investigation during due diligence.","url":"https://www.capbench.com/glossary/expense","official_sources":[],"related":[{"slug":"p-l","term":"P&L","url":"https://www.capbench.com/glossary/p-l"},{"slug":"add-backs","term":"Add-backs","url":"https://www.capbench.com/glossary/add-backs"},{"slug":"salary","term":"Salary","url":"https://www.capbench.com/glossary/salary"},{"slug":"wage","term":"Wage","url":"https://www.capbench.com/glossary/wage"}],"related_questions":[{"question":"How does business overhead expense insurance differ from key-person life insurance?","url":"https://www.capbench.com/sba-7a/questions/how-does-business-overhead-expense-insurance-differ-from-key-person-life-insurance"},{"question":"What kind of everyday expenses can working capital cover?","url":"https://www.capbench.com/sba-7a/questions/what-kind-of-everyday-expenses-can-working-capital-cover"},{"question":"Which pre-closing business expenses can count towards equity?","url":"https://www.capbench.com/sba-7a/questions/which-pre-closing-business-expenses-can-count-towards-equity"},{"question":"Can working capital be used for unexpected business expenses after closing?","url":"https://www.capbench.com/sba-7a/questions/can-working-capital-be-used-for-unexpected-business-expenses-after-closing"},{"question":"Can I use SBA 7(a) loan funds for personal expenses?","url":"https://www.capbench.com/sba-7a/questions/can-i-use-sba-7-a-loan-funds-for-personal-expenses"},{"question":"What types of expenses can an SBA 7(a) loan cover?","url":"https://www.capbench.com/sba-7a/questions/what-types-of-expenses-can-an-sba-7-a-loan-cover"}]},"caveats":["Definitions represent CapBench's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"CapBench Glossary — Expense","url":"https://www.capbench.com/glossary/expense","source_type":"CapBench Data"}}