Glossary · Reading the business
Owner's salary
In short
The compensation an owner takes from the business for their work. Buyers care because this amount needs to be adjusted when evaluating the business's true profitability for a new owner.
What it means in a deal
For an SBA loan, the lender will "add back" the seller's owner salary when calculating Seller's Discretionary Earnings (SDE) or EBITDA. You'll need to factor in a reasonable replacement salary for yourself when projecting your post-acquisition cash flow to ensure the business can support it.
Related terms
Common questions about Owner's salary
- Can working capital from an SBA loan be used to pay myself a salary immediately after closing?
- Can an SBA 7(a) loan be used to pay myself a salary immediately after closing the acquisition?
- Can I use an SBA 7(a) loan to pay myself a salary immediately after closing the acquisition?
- How does a lender confirm an owner's U.S. citizenship if they were born in a U.S. territory or abroad to U.S. parents?
- How does the SBA verify a non-owner investor's funds used for equity injection?
- Can a business owner's personal assets be used as collateral if business assets are limited?
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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