Glossary · Reading the business
Leverage
In short
Using borrowed money (debt) to finance an investment, aiming to magnify the potential returns on your equity. Buyers care because an SBA loan is a form of leverage, allowing you to acquire a larger business than you could with just your personal cash.
What it means in a deal
In an SBA acquisition, leverage is primarily seen through the debt-to-equity ratio of the deal. Lenders assess your overall leverage and the business's ability to service the debt (DSCR) without excessive risk. Understand that while leverage can boost returns, it also increases financial risk if the business underperforms.
Related terms
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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