Glossary · Reading the business
Distribution to owners(Owner distributions)
In short
Payments made from a business's profits or assets to its owners. These are not wages or salaries but a return on their investment.
What it means in a deal
When reviewing financials, analyze distributions to owners to understand how much cash the business historically generated for its owners. Be wary of excessive distributions that might have starved the business of working capital or hidden true profitability. These are often "added back" to calculate SDE or EBITDA.
Related terms
Common questions about Distribution to owners
- Can life insurance be used to ensure fair distribution of assets among non-active heirs in a family business?
- Do all owners of an acquiring business, regardless of ownership percentage, need to provide a personal guaranty?
- Does the SBA require spouses of owners to personally guarantee the loan, even if they have no ownership stake?
- Are all business owners, regardless of their ownership percentage, required to sign a personal guaranty for an SBA 7(a) loan?
- Why do business owners need to personally guarantee SBA 7(a) loans?
- Do all 20% owners have to guarantee an SBA 7(a) loan?
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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