Glossary · Reading the business
Cash Equivalent
In short
This refers to highly liquid assets easily convertible to cash, like short-term government bonds or money market funds. For a buyer, knowing what counts as cash equivalent helps assess a business's true liquidity.
What it means in a deal
When reviewing a target business's balance sheet, differentiate between actual cash and cash equivalents. These can quickly be turned into cash to cover short-term liabilities. Understand a seller's true cash position for working capital needs post-acquisition.
Related terms
Common questions about Cash Equivalent
- What specific certifications on SBA Form 1920 (or E-Tran equivalent) relate to credit elsewhere?
- Which specific lender certifications are required on the Lender's Application for Guaranty (or its E-Tran equivalent) to ensure loan eligibility?
- What specific lender certifications are required on the Lender's Application for Guaranty (SBA Form 1920, or its current equivalent in E-Tran)?
- Besides cash, what non-cash assets can I contribute to meet the 10% equity injection for an $800,000 acquisition?
- Can cash in the business bank account count as collateral?
- Is there a minimum cash portion for the equity injection?
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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