Glossary · Reading the business
Accounts Payable
In short
This represents money the business owes to its suppliers or vendors for goods and services already received. It's a short-term liability that impacts the business's working capital.
What it means in a deal
When analyzing a target business, review its Accounts Payable aging report to understand payment habits and potential overdue bills. High or old AP could indicate cash flow issues. You'll inherit these liabilities, so factor them into your working capital needs post-acquisition.
Related terms
Common questions about Accounts Payable
- Can an SBA 7(a) working capital loan be used to pay off existing accounts payable of the acquired business at closing?
- Can the working capital portion of my SBA 7(a) loan be used to pay existing accounts payable of the acquired business?
- What are the rules for using personal investment accounts (e.g., brokerage accounts) as collateral for an SBA 7(a) loan?
- How does a lender calculate the ongoing annual service fee payable to the SBA for a 7(a) loan?
- Can my business's accounts receivable be used as collateral?
- What if the business being acquired has significant outstanding Accounts Receivable (AR)?
Defined by CapBench 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
Backed by data on 1,000+ SBA lenders and 300,000+ funded deals. Your details go only to lending partners you ask to be matched with — never sold to advertisers.