Glossary · Reading the business
In short
Cash kept aside to cover short-term operational needs, unexpected expenses, or periods of lower revenue. Essential for business stability post-acquisition.
The SBA loan can include funds for Working Capital. You need to ensure the business has sufficient Working Capital Reserves to operate smoothly, especially during a transition or if revenues dip. This is critical for maintaining Solvency and meeting Debt Service Requirements without immediately running out of cash.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. 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 2026-06-15 · 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.
Free · No documents · Usually same-day