Glossary · Reading the business
Owner earnings
In short
Casual term for SDE or adjusted EBITDA — the yearly cash an owner-operator takes out.
What it means in a deal
Owner earnings is an informal term, not a precise accounting measure — which means sellers sometimes use it loosely. When you see it in a listing, ask whether it means SDE (with the owner's salary added back) or adjusted EBITDA (without). The difference matters because those two numbers can diverge significantly depending on how the seller is compensated. Always reconcile the number to the tax returns and bank statements.
Related terms
Common questions about Owner earnings
- Can a business's retained earnings count as equity injection?
- Can I use my business's retained earnings from a prior venture as equity injection?
- Is it necessary to obtain separate life insurance policies for each owner in a multi-owner business?
- Are non-owner spouses always required to personally guarantee SBA loans?
- How does the SBA guarantee primarily benefit me as the business owner?
- Are there any specific training or experience requirements for the business owner?
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 2026-06-16 · 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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