Glossary · Reading the business
In short
Expenses paid in advance for goods or services that will be consumed in the future, such as insurance premiums or rent. They are recorded as assets on the balance sheet.
When reviewing a business's financials, identify significant pre-paid expenses. These represent future benefits already paid for, which can be valuable to you as the new owner. Ensure these assets are appropriately transferred or credited in the purchase agreement. They can impact the working capital calculation at closing.
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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