What is EBITDA?

Reading time: 3 min

    Add a header to begin generating the table of contents
      Add a header to begin generating the table of contents

      What is EBITDA?

      It might appear to be another long-winded financial abbreviation but, actually, EBITDA is a very important little acronym for you if you’re interested in financing a business and equity funding is on your radar.
      It stands for Earnings Before Interest, Tax, Depreciation, and Amortization. It’s basically a complicated description which details your business’s profit.
      EBIDTA will help you calculate your company’s overall earnings or net income before all the necessary evils are taken off. Confused? Don’t worry. We’re here to simplify everything you need to know about business finance.


      EBITDA matters

      If you’re thinking of using equity funding for business you’ll need to get to grips with EBITDA.

      It’s the main figure that equity investors want to know about when they’re considering financing a business. It gives them an idea of your company’s financial stability, profitability and operating performance. And they’re happy to ignore other costs (interest, tax, depreciation and amortization) that can obscure how your business is actually doing. It allows for more accurate comparisons between similar firms – especially if one firm is in the midst of extensive capital projects while another is not.

      What should my EBITDA figure look like to attract investment?

      It depends on what kind of industry you’re in. Investors know this, and they’ll regularly compare a company’s EBITDA figure to the industry average or to another, similar business, before deciding whether to invest. So it’s important to try to optimise your EBITDA figure if you can before you go all-guns-blazing in search of funding.

      Increasing your EBITDA figure


      “If only I had a magic wand!” we hear you say. There’s no need, as there are a few simple steps you can take to improve your profitability and start accessing equity funding for business.

      Start by making sure you maintain your prices because discounts just reduce your EBITDA. And then think about where else you can do to reduce your costs. Could you cut down on travel or entertainment? Manage your inventories better? Start selling to new markets? Omit lines that are losing money?

      Registering free with Swoop will give you the opportunity to integrate your bank account and quickly and safely identify savings across the likes of banking, fx, broadband, and insurance. With average savings per SME being around £3000 it can certainly make a positive impact on your EBITDA.

      Whatever you do to make your EBITDA figure rise will make your business more attractive to equity investors.

      Let Swoop help

      Swoop can talk to you about this, and answer all your EBITDA, and other small business funding questions. We know that funding your business with equity can be very rewarding. But let’s not forget that it can be tough and time-consuming too. And that’s why we’re here, ready and waiting to Swoop in and help – providing you access to equity investors and funding providers, as well as experts, to walk you through the process.

      Click here to get in contact with a team member of Swoop and let us give you a hand.


      Or, click here to get your business registered on Swoop Funding and start your funding or savings journey right away.

      Like what you see? Share with a friend.

      Ready to grow your business?

      Clever finance tips and the latest news

      Delivered to your inbox monthly

      Join the 95,000+ businesses just like yours getting the Swoop newsletter.
      Free. No spam. Opt out whenever you like.

      Newsletter

      Clever finance tips and the latest news

      Delivered to your inbox monthly

      Join the 95,000+ businesses just like yours getting the Swoop newsletter.

      Free. No spam. Opt out whenever you like.

      We work with world class partners to help us support businesses with finance

      Our offices:

      Disclaimer: Swoop Finance helps UK firms access business finance, working directly with businesses and their trusted advisors. We are a credit broker and do not provide loans or other finance products ourselves. We can introduce you to a panel of lenders, equity funds and grant agencies. Whichever lender you choose we may receive commission from them (either a fixed fee of fixed % of the amount you receive) and different lenders pay different rates. For certain lenders, we do have influence over the interest rate, and this can impact the amount you pay under the agreement. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. Swoop Finance can introduce applicants to a number of providers based on the applicants’ circumstances and creditworthiness. Swoop Finance Limited is registered with the Financial Conduct Authority as an Account Information Services Provider (reference number 833145). Swoop Finance Limited is authorised as a credit broker under FCA registration number 936513. If you feel you have a complaint, please read our complaints section highlighted above and also contained within our terms and conditions. Swoop Finance Ltd is registered with Companies House (company number 11163382, registered address The Stable Yard, Vicarage Road, Stony Stratford, Milton Keynes MK11 1BN). VAT number: 300080279

      © Swoop 2025

      Looks like you're in . Go to our site to find relevant products for your country. Go to Swoop