Glossary · Reading the business
Cash flow post-acquisition
In short
The projected net cash generated by the business after all operating expenses, debt service, and owner compensation are paid, once you take over. This is the ultimate measure of the business's ability to support the loan and your salary.
What it means in a deal
This is the most critical financial projection. You need to model the business's cash flow realistically, accounting for new debt payments, your salary, and any changes you anticipate. Lenders use Debt Service Coverage Ratio (DSCR) to ensure the business can comfortably make loan payments.
Official sources
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Cash flow post-acquisition
- Could a significant drop in the buyer's post-acquisition projected cash flow kill SBA 7(a) loan approval?
- If I am buying out a partner, does the SBA require the business to pass a cash flow test post-acquisition?
- Are there any restrictions on the use of cash flow projections for an SBA 7(a) acquisition loan?
- Can a business with a history of negative cash flow still qualify for an SBA 7(a) acquisition loan?
- 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?
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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