Glossary · Reading the business
In short
Cash the business needs on hand to operate — payroll, inventory, the gap between paying suppliers and getting paid.
Working capital is the operational buffer that keeps a business running day to day. If your new business pays suppliers before customers pay you, you need cash in between — that gap is your working capital need. SBA 7(a) loans can include a working-capital component as part of the deal structure, but lenders will scrutinize the amount. Show up to closing with at least one month of operating expenses in liquid reserves beyond your injection.
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-14. Official sources control — verify before relying on any rule for a live deal.
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 2026-06-14 · 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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