Glossary · Reading the business
Rental income
In short
Money a business receives from leasing out property or equipment it owns to another party. Buyers must determine if this income is stable and truly part of the core business being acquired, or if it's from a separate asset.
What it means in a deal
If the business owns commercial real estate and leases a portion of it, that rental income can significantly boost overall cash flow. You need to ensure the rental arrangement is formalized with a lease, at market rates, and ideally long-term. Confirm if this income stream is included in the sale and how it's valued.
Related terms
Common questions about Rental income
- What if the acquired business primarily generates revenue from passive rental income?
- Is a business primarily generating rental income from commercial property eligible for a 7(a) loan?
- Can an SBA 7(a) loan be used to purchase a business that is primarily engaged in real estate rental activities?
- What constitutes "passive income" disqualifying a business from 7(a) loan eligibility?
- What if my personal tax returns show inconsistent income or losses from other ventures?
- Do businesses that primarily generate passive income qualify for an SBA 7(a) loan?
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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