Glossary · Reading the business
In short
A trade payable is money owed by the business to its suppliers for goods or services purchased on credit. These are short-term liabilities on the balance sheet.
When reviewing a business's balance sheet, trade payables indicate how much the business owes its vendors. A high or rapidly increasing amount might suggest cash flow problems or aggressive credit terms. Understand the payment terms with key suppliers, as these directly impact the business's working capital needs. You'll inherit these obligations, so factor them into your post-acquisition cash flow projections.
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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