Glossary · Reading the business
Adjusted EBITDA(EBITDA)
In short
This metric represents a company's earnings before interest, taxes, depreciation, and amortization, further adjusted for non-recurring or discretionary expenses. It shows the core operating profitability for a new owner.
What it means in a deal
Adjusted EBITDA is a key metric lenders use to assess a business's cash flow and repayment capacity for an acquisition loan. Your CPA will help you calculate this by identifying and adding back discretionary expenses, owner's salary adjustments, and non-recurring items to the reported EBITDA. It's often the basis for valuation multiples.
Related terms
Common questions about Adjusted EBITDA
Defined by CapBench 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.
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