Glossary · Reading the business
Accounts receivable
In short
Accounts receivable (A/R) represents the money owed to a business by its customers for goods or services already delivered. As a buyer, A/R is often a key asset that helps determine the business's working capital needs and can serve as collateral for your loan.
What it means in a deal
Lenders evaluate the quality and aging of a business's A/R during underwriting to assess cash flow and potential collateral value. Unpaid A/R can become a "general intangible" if not collected. Understand the seller's collection practices and verify the A/R schedule during due diligence.
Related terms
Common questions about Accounts receivable
- Can my business's accounts receivable be used as collateral?
- What if the business being acquired has significant outstanding Accounts Receivable (AR)?
- Can accounts receivable from the acquired business always serve as sufficient collateral?
- What if the business I'm buying has a significant amount of accounts receivable?
- What specific due diligence is required for accounts receivable included in a business acquisition?
- How does the SBA require lenders to perfect security interests on accounts receivable and inventory?
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.
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