{"ok":true,"canonical_url":"https://dealroom.so/glossary/recapitalization","api_url":"https://dealroom.so/api/public/glossary/recapitalization","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":"recapitalization","term":"Recapitalization","group":"Doing the deal","definition":"Restructuring a company's debt and equity mix, often to change the capital structure without changing ownership. It can involve issuing new stock or refinancing debt.","what_it_means":"In an acquisition context, 'recap' can refer to a situation where the seller is largely cashing out, and the buyer is essentially replacing the seller's equity with new debt and a smaller equity injection. While permissible, lenders will scrutinize the post-acquisition balance sheet to ensure it's not overly leveraged and has sufficient working capital.","url":"https://dealroom.so/glossary/recapitalization","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":"total-project-costs","term":"Total project costs","url":"https://dealroom.so/glossary/total-project-costs"},{"slug":"disguised-debt","term":"Disguised debt","url":"https://dealroom.so/glossary/disguised-debt"}],"related_questions":[{"question":"How does a lender verify existing equity in a business for a recapitalization 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-verify-existing-equity-in-a-business-for-a-recapitalization-7-a-loan"}]},"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 — Recapitalization","url":"https://dealroom.so/glossary/recapitalization","source_type":"DealRoom Data"}}