Glossary · Reading the business
In short
CapEx is money spent by a business to acquire or upgrade long-term assets like buildings, equipment, or machinery. It's crucial for buyers to understand past CapEx to assess the business's asset health and future investment needs.
In a 7(a) acquisition, CapEx often shows up as "add-backs" to owner earnings, as owners might expense these instead of capitalizing them. You need to analyze the business's actual CapEx needs to determine if the current equipment is sufficient or if significant future investment will be required post-acquisition. This impacts your cash flow after debt service.
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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