Glossary · Reading the business
Capital gain
In short
A capital gain is the profit you make from selling an asset (like a business) for more than you paid for it. This is a primary driver for sellers and a potential future benefit for you as a buyer.
What it means in a deal
When you eventually sell the business, the difference between your purchase price and the selling price will likely be a capital gain. Understanding how capital gains are taxed is crucial for your long-term investment strategy. For sellers, maximizing capital gain is often a key motivation, impacting deal structure.
Related terms
Common questions about Capital gain
- Are there specific limits on the amount of working capital that can be included in a 7(a) Working Capital Pilot Program loan?
- What kind of everyday expenses can working capital cover?
- Can an SBA 7(a) loan finance working capital?
- What is the typical repayment term for working capital only?
- Can working capital be used for unexpected business expenses after closing?
- What does 'working capital' mean for an SBA 7(a) loan?
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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