Glossary · Reading the business
Interest Income
In short
This is money a business earns from holding cash in interest-bearing accounts or making short-term investments. For most small businesses, it's usually a minor revenue stream.
What it means in a deal
When reviewing financial statements, you'll see interest income on the Profit and Loss Statement. For an acquisition, focus on core operating revenue; significant interest income might indicate a business that's not actively reinvesting cash or has unusual financial assets. Ensure it's not masking weak operational performance.
Related terms
Common questions about Interest Income
- What if the acquired business primarily generates revenue from passive rental income?
- What constitutes "passive income" disqualifying a business from 7(a) loan eligibility?
- What if my personal tax returns show inconsistent income or losses from other ventures?
- Do businesses that primarily generate passive income qualify for an SBA 7(a) loan?
- Is there an income limit for my business to be "small" by SBA rules?
- What if the business I'm buying has existing deferred revenue or unearned income?
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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