{"ok":true,"canonical_url":"https://dealroom.so/glossary/capital-improvement","api_url":"https://dealroom.so/api/public/glossary/capital-improvement","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-improvement","term":"Capital Improvement","group":"Reading the business","definition":"These are significant additions or alterations to a business's fixed assets, such as property or equipment, that increase their value or extend their useful life, beyond routine maintenance.","what_it_means":"When evaluating a target business, pay close attention to any deferred capital improvements. If the seller has neglected necessary upgrades, you will incur these costs post-acquisition, which will impact your future cash flow. SBA loan funds can be used for these types of improvements, so factor them into your total project costs during due diligence.","url":"https://dealroom.so/glossary/capital-improvement","official_sources":[],"related":[{"slug":"leasehold-improvement","term":"Leasehold improvement","url":"https://dealroom.so/glossary/leasehold-improvement"},{"slug":"total-project-costs","term":"Total project costs","url":"https://dealroom.so/glossary/total-project-costs"},{"slug":"cash-flow","term":"Cash flow","url":"https://dealroom.so/glossary/cash-flow"},{"slug":"useful-life","term":"Useful life","url":"https://dealroom.so/glossary/useful-life"}],"related_questions":[{"question":"Can I finance a significant leasehold improvement project with my SBA 7(a) acquisition loan?","url":"https://dealroom.so/sba-7a/questions/can-i-finance-a-significant-leasehold-improvement-project-with-my-sba-7-a-acquisition-loan"},{"question":"What triggers the need for an Environmental Questionnaire (SBA Form 1081) for a leasehold improvement loan?","url":"https://dealroom.so/for-lenders/questions/what-triggers-the-need-for-an-environmental-questionnaire-sba-form-1081-for-a-leasehold-im"},{"question":"What if the business I'm buying needs significant capital improvements after closing?","url":"https://dealroom.so/sba-7a/questions/what-if-the-business-i-m-buying-needs-significant-capital-improvements-after-closing"},{"question":"Can a tenant improvement allowance from a new landlord count towards my equity injection for a leasehold acquisition?","url":"https://dealroom.so/sba-7a/questions/can-a-tenant-improvement-allowance-from-a-new-landlord-count-towards-my-equity-injection-f"},{"question":"Can SBA 7(a) working capital funds be used for post-acquisition renovations or minor leasehold improvements?","url":"https://dealroom.so/sba-7a/questions/can-sba-7-a-working-capital-funds-be-used-for-post-acquisition-renovations-or-minor-leaseh"},{"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"}]},"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 Improvement","url":"https://dealroom.so/glossary/capital-improvement","source_type":"DealRoom Data"}}