Glossary · Reading the business
In short
These are the financial obligations or debts a business owes to others, like accounts payable or existing loans. Buyers must identify and understand all liabilities to assess the true financial health of the business.
During due diligence, you'll scrutinize the business's balance sheet for all existing liabilities. In an asset purchase, you typically assume only specific, agreed-upon liabilities, while in a stock purchase, you assume all of them. Hidden liabilities are a major risk, so your due diligence and legal review are critical to protect you.
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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