Glossary · Reading the business
Capital Improvement
In short
These are significant additions or alterations to a business's fixed assets, such as property or equipment, that increase their value or extend their useful life, beyond routine maintenance.
What it means in a deal
When evaluating a target business, pay close attention to any deferred capital improvements. If the seller has neglected necessary upgrades, you will incur these costs post-acquisition, which will impact your future cash flow. SBA loan funds can be used for these types of improvements, so factor them into your total project costs during due diligence.
Related terms
Common questions about Capital Improvement
- Can I finance a significant leasehold improvement project with my SBA 7(a) acquisition loan?
- What triggers the need for an Environmental Questionnaire (SBA Form 1081) for a leasehold improvement loan?
- What if the business I'm buying needs significant capital improvements after closing?
- Can a tenant improvement allowance from a new landlord count towards my equity injection for a leasehold acquisition?
- Can SBA 7(a) working capital funds be used for post-acquisition renovations or minor leasehold improvements?
- Are there specific limits on the amount of working capital that can be included in a 7(a) Working Capital Pilot Program 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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