Glossary · Reading the business
Cash Flow Analysis
In short
Cash flow analysis examines a business's ability to generate enough cash to cover its expenses, including debt payments. It's the primary way lenders determine if the business can repay the loan.
What it means in a deal
Lenders scrutinize historical and projected cash flow to ensure the business can service the new SBA loan. They'll look at SDE, EBITDA, and apply add-backs to understand the true owner earnings. A strong DSCR is essential for approval, indicating sufficient cash flow after debt service.
Related terms
Common questions about Cash Flow Analysis
- What specific cash flow analysis adjustments are required for a change-of-ownership with a full standby seller note?
- When underwriting a 7(a) loan, how does a lender ensure that personal resources of the principals are properly considered in the global cash flow analysis?
- Can future cash flow or profits from the acquired business count as equity injection?
- How can an SBA 7(a) loan help with ongoing cash flow for my business?
- What is the primary factor a lender considers when evaluating the cash flow from an acquired business?
- Are there any restrictions on the use of cash flow projections for an SBA 7(a) acquisition 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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