Glossary · Reading the business
Payroll
In short
This refers to the total compensation a business pays to its employees, including salaries, wages, bonuses, and taxes withheld. It's a significant and recurring expense.
What it means in a deal
Review the business's payroll records carefully during due diligence to verify employee costs and identify any discrepancies. Understand how payroll impacts cash flow and if any owner's payroll needs to be added back for SDE calculations. Accurate payroll is essential for operations.
Related terms
Common questions about Payroll
- Can I use an SBA 7(a) loan for inventory, payroll, or rent?
- Can an SBA 7(a) loan be used for business working capital, like payroll?
- What if the business I am buying has unfiled tax returns or overdue payroll taxes?
- What if the business I'm buying has unfiled tax returns or overdue payroll taxes?
- Can I use an SBA 7(a) loan for general operating expenses, like payroll or rent?
- Can I use an SBA 7(a) loan to cover operating expenses like payroll or rent?
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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