Glossary · Reading the business
Existing Liabilities
In short
These are the financial obligations or debts a business currently owes, such as accounts payable, outstanding loans, or deferred revenue.
What it means in a deal
During due diligence, meticulously identify all existing liabilities of the target business. In an asset purchase, you typically avoid assuming most of the seller's liabilities, but verify this. For a stock purchase, you inherit everything, so understanding these is critical to your cash flow and deal structure.
Related terms
Common questions about Existing Liabilities
- What due diligence must a lender perform regarding the seller's existing debt and liabilities in a 7(a) business acquisition?
- What happens if the business being acquired has significant outstanding tax liabilities at closing?
- What if the business I want to acquire has undisclosed liabilities discovered during due diligence?
- Does finding significant undisclosed liabilities during due diligence kill an SBA 7(a) acquisition loan?
- If multiple owners each guarantee the loan, are their liabilities typically joint and several or individual?
- Can unreported tax liabilities discovered during due diligence from the seller's business kill my acquisition loan?
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.
Pressure-test the numbers before you make an offer
Send us the asking price and the seller's cash flow — we'll show whether the deal services SBA debt and where the add-backs are likely to hold up.
Free · No documents · Usually same-day
Backed by data on 1,000+ SBA lenders and 300,000+ funded deals. Your details go only to lending partners you ask to be matched with — never sold to advertisers.