Hi all - I'm working on a deal where the seller lists ~$75K annually in discretionary travel, meals, and entertainment, all on a business credit card. The seller noted that these were personal expenses for traveling around the country for concerts, but the seller's clients and business is located only in CA.

My understanding is that lenders won't consider travel, meals, and entertainment as legitimate add-backs, but I'd appreciate if someone can provide some clarity on why that is? For example, if receipts show that the owner's travel was outside of CA and expenses were outside of CA, would this not be sufficient to show that the expenses were not related to running the business?