Glossary · Reading the business
Gross profit margin
In short
This metric shows how much revenue is left after subtracting the direct costs of making a product or providing a service. It indicates the core profitability of the business's operations.
What it means in a deal
A strong gross profit margin means the business efficiently produces its goods or services. When evaluating a target business, compare its margin to industry benchmarks. A declining margin might signal pricing issues or rising production costs, impacting your ability to repay the loan.
Related terms
Common questions about Gross profit margin
- Can a non-profit organization with a for-profit subsidiary be eligible for a 7(a) loan?
- Can a non-profit organization receive an SBA 7(a) loan?
- Does my business need to be a for-profit company to qualify?
- Can a non-profit organization qualify for an SBA 7(a) loan?
- Can a non-profit organization receive an SBA 7(a) loan for their activities?
- Can a business that is not for profit receive 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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