{"ok":true,"canonical_url":"https://dealroom.so/glossary/useful-life","api_url":"https://dealroom.so/api/public/glossary/useful-life","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":"useful-life","term":"Useful life","group":"Reading the business","definition":"The estimated period an asset is expected to be functional and productive for the business. Buyers care because it impacts depreciation, future capital expenditures, and the overall long-term value and operational efficiency of the assets you're acquiring.","what_it_means":"During due diligence, review the age and condition of major equipment and other tangible assets to estimate their remaining useful life. This helps you project future capital expenditure needs, ensuring the business's cash flow won't be immediately drained by replacing worn-out assets shortly after acquisition. Factor this into your financial projections.","url":"https://dealroom.so/glossary/useful-life","official_sources":[],"related":[{"slug":"tangible-asset","term":"Tangible asset","url":"https://dealroom.so/glossary/tangible-asset"},{"slug":"working-capital","term":"Working capital","url":"https://dealroom.so/glossary/working-capital"},{"slug":"cash-flow","term":"Cash flow","url":"https://dealroom.so/glossary/cash-flow"},{"slug":"financial-projections","term":"Financial projections","url":"https://dealroom.so/glossary/financial-projections"}],"related_questions":[{"question":"When is term life insurance more suitable than permanent life insurance for business protection?","url":"https://dealroom.so/sba-7a/questions/when-is-term-life-insurance-more-suitable-than-permanent-life-insurance-for-business-prote"},{"question":"Is a decreasing term life insurance policy acceptable for the SBA's life insurance requirement on a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/is-a-decreasing-term-life-insurance-policy-acceptable-for-the-sba-s-life-insurance-require"},{"question":"How are appropriate business life insurance coverage amounts calculated?","url":"https://dealroom.so/sba-7a/questions/how-are-appropriate-business-life-insurance-coverage-amounts-calculated"},{"question":"Can a borrower's existing personal life insurance policy be used to satisfy the SBA's life insurance requirement for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/can-a-borrower-s-existing-personal-life-insurance-policy-be-used-to-satisfy-the-sba-s-life"},{"question":"How does disability insurance complement life insurance for business protection?","url":"https://dealroom.so/sba-7a/questions/how-does-disability-insurance-complement-life-insurance-for-business-protection"},{"question":"What defines 'insurable interest' for a business life insurance policy?","url":"https://dealroom.so/sba-7a/questions/what-defines-insurable-interest-for-a-business-life-insurance-policy"}]},"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 — Useful life","url":"https://dealroom.so/glossary/useful-life","source_type":"DealRoom Data"}}