{"ok":true,"canonical_url":"https://dealroom.so/glossary/capital-expenditure","api_url":"https://dealroom.so/api/public/glossary/capital-expenditure","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"capital-expenditure","term":"Capital Expenditure","group":"Reading the business","definition":"CapEx is money spent by a business to acquire or upgrade long-term assets like buildings, equipment, or machinery. It's crucial for buyers to understand past CapEx to assess the business's asset health and future investment needs.","what_it_means":"In a 7(a) acquisition, CapEx often shows up as \"add-backs\" to owner earnings, as owners might expense these instead of capitalizing them. You need to analyze the business's actual CapEx needs to determine if the current equipment is sufficient or if significant future investment will be required post-acquisition. This impacts your cash flow after debt service.","url":"https://dealroom.so/glossary/capital-expenditure","official_sources":[],"related":[{"slug":"add-backs","term":"Add-backs","url":"https://dealroom.so/glossary/add-backs"},{"slug":"cash-flow-after-debt-service","term":"Cash flow after debt service","url":"https://dealroom.so/glossary/cash-flow-after-debt-service"},{"slug":"owner-earnings","term":"Owner earnings","url":"https://dealroom.so/glossary/owner-earnings"},{"slug":"due-diligence","term":"Due diligence","url":"https://dealroom.so/glossary/due-diligence"}],"related_questions":[{"question":"How does a lender assess deferred maintenance or capital expenditure needs of an acquired business?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-assess-deferred-maintenance-or-capital-expenditure-needs-of-an-acquired-"},{"question":"What if the business I'm buying needs significant capital expenditures soon after acquisition?","url":"https://dealroom.so/sba-7a/questions/what-if-the-business-i-m-buying-needs-significant-capital-expenditures-soon-after-acquisit"},{"question":"What if the business I'm buying needs significant capital expenditures immediately after closing?","url":"https://dealroom.so/sba-7a/questions/what-if-the-business-i-m-buying-needs-significant-capital-expenditures-immediately-after-c"},{"question":"Can I use an SBA 7(a) loan to acquire a business that requires significant post-acquisition capital expenditures?","url":"https://dealroom.so/sba-7a/questions/can-i-use-an-sba-7-a-loan-to-acquire-a-business-that-requires-significant-post-acquisition"},{"question":"Are there specific limits on the amount of working capital that can be included in a 7(a) Working Capital Pilot Program loan?","url":"https://dealroom.so/for-lenders/questions/are-there-specific-limits-on-the-amount-of-working-capital-that-can-be-included-in-a-7-a-w"},{"question":"What kind of everyday expenses can working capital cover?","url":"https://dealroom.so/sba-loans/basics/what-kind-of-everyday-expenses-can-working-capital-cover"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Capital Expenditure","url":"https://dealroom.so/glossary/capital-expenditure","source_type":"DealRoom Data"}}