Glossary · Reading the business
In short
This is any money the target business owes to lenders, vendors, or others. When acquiring a business, you need to understand what debt you'll inherit or what needs to be paid off at closing.
As a buyer, you must identify all existing business debt during due diligence. In an asset purchase, most operational debt remains with the seller, but you need to ensure all liens are released. In a stock purchase, you typically assume all existing liabilities, including debt. Your lender will require all seller debt to be paid off or refinanced at closing, unless it's explicitly part of the deal structure.
Defined by DealRoom.so SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
Pressure-test the numbers before you make an offer
Send us the asking price and the seller's cash flow — we'll show whether the deal services SBA debt and where the add-backs are likely to hold up.
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