Glossary · Reading the business
Net Operating Income(NOI)
In short
A measure of a business's profitability before taxes and interest, often used for real estate. For general businesses, buyers typically focus on SDE or EBITDA for valuation.
What it means in a deal
While NOI is common in real estate, for a general business acquisition, you'll primarily look at Seller's Discretionary Earnings (SDE) or EBITDA. NOI helps assess the operational profitability of any real estate included in the deal, separating property performance from overall business performance. Understand which metric the seller is using.
Related terms
Common questions about Net Operating Income
- What is the specific personal net worth threshold that triggers a personal guaranty requirement for an owner?
- Can I use an SBA 7(a) loan to purchase a business with a negative net worth?
- Can an SBA 7(a) loan be used to purchase a business with a negative net worth?
- What if the acquired business primarily generates revenue from passive rental income?
- What constitutes "passive income" disqualifying a business from 7(a) loan eligibility?
- Can an SBA 7(a) loan be used to purchase a business with a negative tangible net worth?
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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