Glossary · Reading the business
Cash Flow Statements
In short
A financial report showing how much cash a business generates and uses over a period, categorized into operating, investing, and financing activities. It's crucial for understanding true liquidity.
What it means in a deal
Along with Profit and Loss Statements and Balance Sheets, Cash Flow Statements are vital for due diligence. They reveal the business's actual ability to generate cash to cover expenses and debt service, which is a primary concern for your SBA lender assessing repayment capacity.
Related terms
Common questions about Cash Flow Statements
- 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?
- Can I use an SBA 7(a) loan for my business's daily operating expenses or cash flow?
- How does a lender evaluate the reasonableness of a borrower's projections for future revenue and cash flow?
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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