Glossary · Reading the business
Cost or Market
In short
An accounting principle for valuing inventory, stating it should be recorded at the lower of its original cost or its current market value. This prevents overstating asset values.
What it means in a deal
When reviewing inventory during due diligence, this principle helps ensure the balance sheet isn't inflated with obsolete or devalued stock. Your lender will want an accurate inventory valuation, as it impacts the overall asset value and potentially collateral for the loan.
Related terms
Common questions about Cost or Market
- Can an SBA 7(a) loan cover the cost of initial marketing and advertising for the acquired business?
- Can an SBA 7(a) loan cover the cost of a business valuation or appraisal?
- Can an SBA 7(a) loan finance the cost of a franchise fee for a new or existing franchise?
- What factors primarily influence the premium cost of business life insurance?
- What are the common triggers that lead to an SBA programmatic or secondary market review of a lender's 7(a) loan portfolio?
- Can an SBA 7(a) loan cover the cost of inventory for a 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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