{"ok":true,"canonical_url":"https://dealroom.so/glossary/capital-structure","api_url":"https://dealroom.so/api/public/glossary/capital-structure","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-structure","term":"Capital Structure","group":"Reading the business","definition":"This refers to how a business finances its operations and growth through debt and equity. Understanding it shows you the existing financial leverage and how your 7(a) loan will fit in.","what_it_means":"When buying a business, analyze the existing capital structure to see what debt the business carries and how much equity the current owner has invested. Your acquisition will likely replace existing debt with your 7(a) loan and seller financing, plus your equity injection, fundamentally changing this structure.","url":"https://dealroom.so/glossary/capital-structure","official_sources":[],"related":[{"slug":"equity-injection","term":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"},{"slug":"seller-note","term":"Seller note","url":"https://dealroom.so/glossary/seller-note"},{"slug":"overall-leverage","term":"Overall Leverage","url":"https://dealroom.so/glossary/overall-leverage"},{"slug":"balance-sheet","term":"Balance Sheet","url":"https://dealroom.so/glossary/balance-sheet"}],"related_questions":[{"question":"How does the purchase agreement structure affect an SBA partner buyout?","url":"https://dealroom.so/sba-7a/questions/how-does-the-purchase-agreement-structure-affect-an-sba-partner-buyout"},{"question":"Can I change my business structure after getting an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/can-i-change-my-business-structure-after-getting-an-sba-7-a-loan"},{"question":"How does seller financing structure impact the required equity injection for a business acquisition?","url":"https://dealroom.so/for-lenders/questions/how-does-seller-financing-structure-impact-the-required-equity-injection-for-a-business-ac"},{"question":"Are there specific requirements for the business entity structure for an SBA 7(a) loan?","url":"https://dealroom.so/sba-7a/questions/are-there-specific-requirements-for-the-business-entity-structure-for-an-sba-7-a-loan"},{"question":"Does my business legal structure (like LLC or Sole Proprietorship) affect SBA 7(a) loan eligibility?","url":"https://dealroom.so/sba-loans/basics/does-my-business-legal-structure-like-llc-or-sole-proprietorship-affect-sba-7-a-loan-eligi"},{"question":"Can an earn-out provision in a purchase agreement affect 7(a) loan eligibility or structure?","url":"https://dealroom.so/for-lenders/questions/can-an-earn-out-provision-in-a-purchase-agreement-affect-7-a-loan-eligibility-or-structure"}]},"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 Structure","url":"https://dealroom.so/glossary/capital-structure","source_type":"DealRoom Data"}}