Glossary · Reading the business
Administrative Cost
In short
Expenses related to the general management and overhead of a business, not directly tied to producing goods or services. Examples include office rent, salaries for administrative staff, and utilities.
What it means in a deal
These costs are part of the business's operating expenses and directly impact its overall profitability. When analyzing financial statements, identify whether administrative costs are reasonable for the business's size and industry. High or rapidly increasing administrative costs without corresponding revenue growth can be a warning sign.
Related terms
Common questions about Administrative Cost
- Can closing costs such as legal and accounting fees be included in the total project cost for the 10% calculation?
- How do shared administrative services, like HR or accounting, automatically trigger affiliation for size determination?
- Does sharing common administrative services, like HR or accounting, automatically trigger affiliation for size determination?
- What specific components are included in the lender's administrative fee for an SBA 7(a) loan?
- What factors primarily influence the premium cost of business life insurance?
- Can an SBA 7(a) loan cover the cost of inventory for a business?
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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