Glossary · Reading the business
Draw
In short
Money taken out of a business by its owner, often for personal use, especially in partnerships or sole proprietorships. Buyers care because it directly reduces the business's available cash and needs to be accounted for when analyzing profitability.
What it means in a deal
Similar to owner's salary, draws are usually "added back" to calculate SDE or EBITDA when underwriting an SBA loan. You need to identify if these draws were legitimate business expenses or personal distributions, as they affect the true profitability you can expect.
Related terms
Common questions about Draw
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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