Glossary · Reading the business
Client retention
In short
This measures how many customers a business keeps over time. High client retention indicates a stable revenue stream and a strong customer base, which is crucial for your business's future cash flow.
What it means in a deal
During due diligence, you must analyze client concentration and churn rates. A 7(a) lender will look closely at this, especially if a few clients represent a large portion of revenue. Ensure you understand existing client relationships and have a plan to maintain them to protect your post-acquisition cash flow.
Related terms
Common questions about Client retention
- Can an SBA 7(a) loan be used to purchase another company's client list?
- Can I use an SBA 7(a) loan to acquire a business that relies heavily on a single client?
- What if the business I'm acquiring has a high customer concentration, with one client representing 50% of revenue?
- What if the business I am buying has a high customer concentration, with one client representing 50% of revenue?
- Can an SBA 7(a) loan finance the intangible assets of a service business, such as client lists or recurring contracts?
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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