Glossary · Reading the business
In short
When a business's tangible assets (like cash, equipment) are less than its liabilities. This often indicates heavy reliance on intangible assets or significant debt.
Many small businesses, especially service-based ones, might show negative tangible net worth due to low physical asset bases and high goodwill from previous acquisitions. Lenders focus more on cash flow and repayment capacity for these deals. Understand how intangible assets like goodwill are valued and if they truly support the purchase price.
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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