Glossary · Doing the deal
In short
Restructuring a company's debt and equity mix, often to change the capital structure without changing ownership. It can involve issuing new stock or refinancing debt.
In an acquisition context, 'recap' can refer to a situation where the seller is largely cashing out, and the buyer is essentially replacing the seller's equity with new debt and a smaller equity injection. While permissible, lenders will scrutinize the post-acquisition balance sheet to ensure it's not overly leveraged and has sufficient working capital.
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.
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