Glossary · Reading the business
Customer acquisition cost
In short
The total cost of sales and marketing efforts required to acquire a new customer. Understanding this metric is crucial for evaluating the efficiency of the business's growth strategies and future profitability.
What it means in a deal
Analyze the business's CAC during due diligence by reviewing marketing and sales expenses relative to new customer numbers. A high CAC relative to customer lifetime value can indicate unsustainable growth or inefficient marketing. You need to know if the business can profitably attract new customers post-acquisition.
Related terms
Common questions about Customer acquisition cost
- How does high customer concentration in a target business affect SBA 7(a) acquisition loan approval?
- Can an SBA 7(a) loan cover the cost of a franchise transfer fee in an acquisition?
- Can closing costs such as legal and accounting fees be included in the total project cost for the 10% calculation?
- Can an SBA 7(a) loan finance the cost of purchasing a commercial vehicle fleet as part of a business acquisition?
- Can a 7(a) loan finance the purchase of intangible assets like customer lists or trade secrets in a business acquisition?
- Can a high customer concentration (e.g., one customer is 50% of revenue) jeopardize my SBA 7(a) loan approval?
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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