SBA 7(a) Q&A
Short answer
The duration working capital lasts depends entirely on the business's specific needs and burn rate, but lenders typically underwrite for 3-6 months of post-acquisition operating expenses.
There's no fixed SBA rule for how long working capital must last. Lenders assess the business's historical operating expenses, projected post-acquisition cash flow, and seasonal fluctuations to determine an appropriate working capital amount. This amount is meant to provide a cushion during the transition period or for growth initiatives.
A buyer acquires a business that has monthly operating expenses of $20,000. If the loan includes $80,000 for working capital, it's designed to cover approximately four months of these expenses, assuming no immediate revenue contributions.
Lenders want to ensure the requested working capital is sufficient to support the business's operational needs without causing immediate cash flow distress, especially during the crucial post-acquisition phase. They evaluate the business's historical expenses and realistic projections.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
7(a) Loan Program — Terms, Conditions, and Eligibility
U.S. Small Business Administration · Official SBA source
SOP 50 10 - Lender and Development Company Loan Programs
Last checked 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
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