Glossary · Reading the business
Commingling of Funds
In short
Mixing personal funds with business funds, or funds from separate businesses, in a single account. This practice creates accounting headaches, obscures true business performance, and is a red flag for SBA lenders.
What it means in a deal
During due diligence, look for signs of commingling in the seller's bank statements. This makes it difficult to accurately assess the business's profitability and cash flow. After acquisition, ensure you maintain separate business and personal accounts to avoid audit issues and maintain clear financial records.
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 Commingling of Funds
- Can I use funds from a personal line of credit as part of my equity injection?
- Can funds from an unsecured personal line of credit be considered part of my equity injection?
- How does the SBA verify the source of my equity injection funds?
- What documentation is required to prove the source of my equity injection funds?
- What specific documentation is required to verify the source of my equity injection funds?
- How does a lender verify the source of a borrower's equity injection funds?
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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