Glossary · Reading the business
Deferred Maintenance
In short
This is necessary repairs or upkeep that have been put off. It's important because it represents hidden costs you'll have to pay after closing to keep the business operating, impacting your post-acquisition cash flow.
What it means in a deal
When you're doing due diligence, look for signs of deferred maintenance in equipment, vehicles, or the physical premises. Get an inspection to quantify these costs. Factor these into your total project costs or negotiate a lower purchase price to cover the future expense.
Related terms
Common questions about Deferred Maintenance
- How does a lender assess deferred maintenance or capital expenditure needs of an acquired business?
- Are there any annual maintenance or servicing fees that I, as the borrower, pay to the SBA directly?
- What is the requirement for a lender to ensure proper maintenance of life insurance collateral on key principals?
- What if the business I'm buying has existing deferred revenue or unearned income?
- Can a partial equity injection come from a deferred management bonus from my current employer?
- How does a lender underwrite a business acquisition with existing deferred revenue or unearned income?
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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