Glossary · Reading the business
Capital Structure
In short
This refers to how a business finances its operations and growth through debt and equity. Understanding it shows you the existing financial leverage and how your 7(a) loan will fit in.
What it means in a deal
When buying a business, analyze the existing capital structure to see what debt the business carries and how much equity the current owner has invested. Your acquisition will likely replace existing debt with your 7(a) loan and seller financing, plus your equity injection, fundamentally changing this structure.
Related terms
Common questions about Capital Structure
- How does the purchase agreement structure affect an SBA partner buyout?
- Can I change my business structure after getting an SBA 7(a) loan?
- How does seller financing structure impact the required equity injection for a business acquisition?
- Are there specific requirements for the business entity structure for an SBA 7(a) loan?
- Does my business legal structure (like LLC or Sole Proprietorship) affect SBA 7(a) loan eligibility?
- Can an earn-out provision in a purchase agreement affect 7(a) loan eligibility or structure?
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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