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Reference · Business-buying terms

The business-buying glossary

Plain-English definitions of the deal terms that decide whether you overpay or get financed.

By Ben Kelly, Founder, Acquisition Ace · Updated July 28, 2026

Start here: The three terms that drive almost every deal are SDE (what a business earns), the multiple (what you pay for it), and DSCR (whether the loan gets approved). Everything else, standby notes, add-backs, the equity injection, is a lever around those three.

A C D E G H I L P Q R S W

A

AAdd-Backs → AAmortization → AAsset Sale →

C

CConfidential Information Memorandum (CIM) → CCustomer Concentration →

D

DDebt Service Coverage Ratio (DSCR) →

E

EEarnout → EEBITDA → EEntrepreneurship Through Acquisition (ETA) → EEquity Injection →

G

H

HHoldCo (Holding Company) →

I

IIndication of Interest (IOI) →

L

LLetter of Intent (LOI) →

P

PPersonal Guarantee → PPrime Rate →

Q

QQuality of Earnings (QoE) →

R

RROBS (Rollovers as Business Startups) →

S

SSBA 504 Loan → SSBA 7(a) Loan → SSBA Guaranty Fee → SSBSS Score (FICO SBSS) → SSearch Fund → SSeller Financing → SSeller Note → SSeller's Discretionary Earnings (SDE) → SSOP 50 10 → SStandby Note (Full Standby) → SStock Sale →

W

WWorking Capital Peg →

Put the vocabulary to work

Run a real deal through the calculators built on these terms.

DSCR Calculator Valuation Calculator

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Educational only, not financial, legal, or tax advice, and not a loan offer. SBA rules and rates change; confirm current requirements with an SBA-preferred lender before structuring a deal.

Every term, A, Z (60)

Add Backs→Add On Acquisition→Amortization→Asset Purchase Agreement→Asset Sale→Bolt On→Buy Box→Cap Rate→Cim→Collateral→Customer Concentration→Days On Market→Deal Box→Dscr→Due Diligence→Earnest Money→Earnout→Ebitda→Equity Injection→Escrow→Eta→Franchise Disclosure Document→Gift Of Equity→Goodwill→Heloc→Holdco→Indemnification→Ioi→Lien→Loi→Multiple Arbitrage→Nda→Net Working Capital→Non Compete→Personal Guarantee→Platform Company→Prime Rate→Promissory Note→Quality Of Earnings→Recast→Reps And Warranties→Robs→Sba 504→Sba 7A→Sba Express→Sba Guaranty Fee→Sbss Score→Sde→Search Fund→Seller Financing→Seller Note→Sop 50 10→Standby Note→Stock Sale→Subordination→Teaser→Transition Period→Ucc Filing→Working Capital→Working Capital Peg→