Glossary · The loan itself
Debt restructuring
In short
This is changing the terms of an existing debt, like reducing payments or extending the loan period. Buyers care because it affects the business's cash flow and its ability to cover new loan payments.
What it means in a deal
If the business you're buying has existing debt, you need to understand its current terms. Debt restructuring might be a way to improve cash flow post-acquisition, but it's often a sign of past financial distress. Your lender will scrutinize any existing debt and how it impacts the business's ability to service new SBA debt.
Related terms
Common questions about Debt restructuring
- How is prior owner debt converted to equity treated for injection purposes?
- Can I use an SBA 7(a) loan to refinance existing business debt?
- Can an SBA 7(a) loan be used to refinance existing business debt?
- Can I use an SBA 7(a) loan to pay off personal debt?
- Does the SBA require a specific debt service coverage ratio (DSCR) for approval?
- What is the debt-to-worth ratio requirement for a $0-down partner buyout?
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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