Glossary · Reading the business
Overhead
In short
These are the ongoing costs of running a business that aren't directly tied to producing a product or service, like rent, utilities, and administrative salaries. Understanding overhead helps you predict future profitability.
What it means in a deal
In an acquisition, you'll scrutinize the business's Profit and Loss Statement for consistent overhead expenses. Identify any discretionary or owner-related overhead "add-backs" that won't continue under your ownership. High or uncontrolled overhead can quickly erode profits, especially if sales projections are missed.
Related terms
Common questions about Overhead
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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