{"ok":true,"canonical_url":"https://dealroom.so/glossary/negative-cash-flow","api_url":"https://dealroom.so/api/public/glossary/negative-cash-flow","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":"negative-cash-flow","term":"Negative Cash Flow","group":"Reading the business","definition":"When a business spends more cash than it brings in over a period. This is a critical red flag, indicating the business cannot cover its expenses, including debt service.","what_it_means":"A business with negative cash flow cannot support debt. Lenders will look closely at cash flow projections and historical performance. If the business consistently generates negative cash flow, an SBA loan is highly unlikely, as it indicates a lack of repayment capacity. Dig deep into the reasons why this is happening.","url":"https://dealroom.so/glossary/negative-cash-flow","official_sources":[],"related":[{"slug":"cash-flow","term":"Cash flow","url":"https://dealroom.so/glossary/cash-flow"},{"slug":"repayment-capacity","term":"Repayment capacity","url":"https://dealroom.so/glossary/repayment-capacity"},{"slug":"dscr","term":"DSCR","url":"https://dealroom.so/glossary/dscr"},{"slug":"financial-projections","term":"Financial projections","url":"https://dealroom.so/glossary/financial-projections"}],"related_questions":[{"question":"Can a business with a history of negative cash flow still qualify for an SBA 7(a) acquisition loan?","url":"https://dealroom.so/sba-7a/questions/can-a-business-with-a-history-of-negative-cash-flow-still-qualify-for-an-sba-7-a-acquisiti"},{"question":"Can future cash flow or profits from the acquired business count as equity injection?","url":"https://dealroom.so/for-lenders/questions/can-future-cash-flow-or-profits-from-the-acquired-business-count-as-equity-injection"},{"question":"How can an SBA 7(a) loan help with ongoing cash flow for my business?","url":"https://dealroom.so/sba-loans/basics/how-can-an-sba-7-a-loan-help-with-ongoing-cash-flow-for-my-business"},{"question":"What is the primary factor a lender considers when evaluating the cash flow from an acquired business?","url":"https://dealroom.so/sba-7a/questions/what-is-the-primary-factor-a-lender-considers-when-evaluating-the-cash-flow-from-an-acquir"},{"question":"Are there any restrictions on the use of cash flow projections for an SBA 7(a) acquisition loan?","url":"https://dealroom.so/sba-7a/questions/are-there-any-restrictions-on-the-use-of-cash-flow-projections-for-an-sba-7-a-acquisition-"},{"question":"Can I use an SBA 7(a) loan for my business's daily operating expenses or cash flow?","url":"https://dealroom.so/sba-loans/basics/can-i-use-an-sba-7-a-loan-for-my-business-s-daily-operating-expenses-or-cash-flow"}]},"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 — Negative Cash Flow","url":"https://dealroom.so/glossary/negative-cash-flow","source_type":"DealRoom Data"}}